Welfare Reform and Intergenerational Mobility

Quick Summary

This 2010 report reviewed research on the impact of the 1996 welfare reform law on the economic mobility of TANF recipients and their children. The review found that research investigating the impact of welfare reform on the economic outcomes of children was limited, but the research that did exist showed no evidence that children had seen large benefits or harm as a result of the legislation.

“Welfare reform” of the late 1990s was enacted with the intention of encouraging recipients—the vast majority of whom are single mothers—to gain a foothold on the economic ladder and improve the economic prospects of their children. Signed into law by President Clinton in 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) established the Temporary Assistance for Needy Families (TANF) program and made profound changes to the ways in which low-income families received assistance. It eliminated the guarantee of receiving welfare, mandated work requirements, imposed strict limits on the length of time benefits could be received, and gave states greater flexibility in implementation.

As policymakers consider the upcoming reauthorization of TANF—and in light of the many people who are seeking assistance in the current recession—this literature review explores these reforms and how they may have had an impact on the economic mobility of TANF recipients and their children.

This 2010 report outlined the key components of welfare reform, changes in parental welfare use since 1996, and how these changes might have impacted children's economic outcomes. For instance, the program parameters influenced mothers' ability to receive welfare support and the duration of this receipt. They likely affected recipients' employment and their family's total income and may also had an effect on living arrangements and the number of children they have. These changes, in turn, may have impacted a wide range of child outcomes including health, cognitive development, and behavioral adjustment—all of which are indicators of a child's economic mobility.