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With that concession, why might someone think that welfare reform made children better off?
As I discuss in my new paper, “Poverty after Welfare Reform,” child-poverty rates are not only unambiguously lower than in 1996, they are at an all-time low.
More controversial is the question of whether “deep poverty” (being under half the poverty line) or “extreme poverty” (living under $2 a day per person) has increased.
Some criticisms of PRWORA have used poverty statistics that convey too dour — sometimes, as with the extreme-poverty estimates, far too dour — a view of how children have fared.
But, the main criticisms of PRWORA that have emerged come from Peter Germanis, a senior policy advisor in the federal office that administers TANF who worked on welfare reform in the Reagan administration and who now writes essays independently as “Peter the Citizen” decrying what a disaster TANF is.
My own figures, which I argue treat health benefits and inflation more appropriately, find a rise from 0.9 percent to 2.0 percent, with the rate falling to 1.7 percent by 2012 (lower than in 1997).
Both CBPP’s and my figures rely on a variety of imputations and ignore the problem of underreported earnings. But strong conclusions from the data are not merited, given the low levels and small changes involved.First, child poverty declined, and this decline occurred concurrently with dramatically falling welfare rolls and increasing work among single mothers.That doesn’t prove causality by any stretch, but my conclusions about the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) would be very different if all three of these trends hadn’t coincided.It fell thereafter, but it remains around 55 percent today.Among never-married mothers, employment rose from less than 45 percent in 1992 to about 65 percent in 2000. During the period in which single mothers’ employment jumped, it rose modestly among married mothers and not at all among single childless women.But PRWORA might have increased employment in at least three ways.It might have led states to invest in welfare recipients and to actively assist them in finding work.The EITC expansion and welfare reforms were complementary: Child poverty would not have fallen if only one or the other had occurred.Welfare reform made not working untenable for many single mothers, and the EITC expansion made work more attractive.The handful of papers that adjudicate between the effect of reform (and the state waivers before 1996) and other factors find that welfare reform was at least as important as the 1993 expansion of the Earned Income Tax Credit (or EITC, a subsidy for low-income workers) in reducing welfare receipt, both of which were larger factors than the improving labor market.The EITC was the most important factor behind rising employment among single mothers, but welfare reform was roughly as important as the economy.