Welfare Reform Studies Give Reason for New Hope

Research shows positive effects overall — some caveats.
By Ed Finkel

When federal welfare lation passed in 1996, those in favor promised it would motivate long-time recipients to enter the labor market, make a decent wage and improve their family situations. Those opposed said it would force mothers into dead-end jobs and their children into substandard day care, creating a lose-lose situation that would only get worse once the economy slowed from its late 1990s boom.

Photo by Rosalie Winard.

The Personal Responsibility and Work Opportunity Reconciliation Act ended the federal government's 60-year-long open-ended financial commitment to low-income families, limiting benefits to five years overall, and requiring work as a condition for receiving benefits. The debate over the legislation became especially shrill in part because little research existed to confirm either viewpoint.

Now, some evidence has come in: Separate studies released during the past several months by three professors in Northwestern School of Education and Social Policy give credence to both viewpoints, although the overall findings could be described as cautiously optimistic — especially since they tracked the fate of families and children as the economy slid into recession in 2001.

Professor Dan Lewis' seven-year Illinois Families Study of 1,500 families found that half of welfare recipients had found work; family income had doubled on average from 1998 to 2001; and hardships such as homelessness had not increased, says Lewis, also a faculty fellow at Northwestern's Institute for Policy Research.

"You've got a package of findings here that tell a policy-maker and the American public that we're going in the right direction," Lewis says. "And that's important. It doesn't mean the [problem] is solved, but even the most conservative people never dreamed that they'd be seeing these kinds of results."

Similarly, Professor Lindsay-Chase-Lansdale's three-city study of 2,400 families, 40 percent of whom were on welfare, found no negative effects on children or teenagers when their parents went to work. "We wanted to have the voice of the children and the families in the picture," says Chase-Lansdale, of the $20 million project that ran from 1999 through this year in Boston, Chicago and San Antonio. The results received top-of-the-fold play in the media after running in the March 7, 2003, issue of Science. "There was a lot of interest because of this polarized political viewpoint about the impact on children."

Professor Greg Duncan's five-year follow-up study of families who participated in the New Hope Project, a nonprofit-funded experimental program that provided a robust package of benefits to 745 for three years to Milwaukee families found positive repercussions on children, but negative results for teens, says Duncan, also director of the Northwestern University/University of Chicago Joint Center on Poverty Research.

"The families were less likely to be poor, continued to be more plugged into community supports, had more high-paying jobs and continued to use more formal child-care arrangements," even though their New Hope subsidies for such arrangements had ended, Duncan says. "If states believe children's well-being is a goal of welfare reform, here's a program that not only increases employment and family income but can have positive and durable impacts on children's achievement."

Lewis' study, which coverend families in nine Illinois counties, gives perhaps the clearest qualitative breakdown of the good news-bad news scenarios that all three studies share. In an in-depth interviewing process, IFS researchers analyzed content of 57 respondents, categorizing 68 percent as "Providers," who have worked hard to obtain and retain jobs (one third of whom were labeled "Reluctant Providers," who resented having to do so); 19 percent as "Nurturers," who have found alternative sources of income so they can stay home with their children; and 12 percent as "Disaffected," who have simply found it difficult to cope with welfare reform.

Recipients' reactions to the consequences of welfare reform span the same spectrum as those of policy-makers and other members of the general public, although Lewis says 80 to 90 percent agree with the time limits and work requirements.

April, a 42-year-old mother of one, is outspoken about the benefits of welfare reform. "I'm actually glad the government put a time limit on it," she says. "It made the lazy people go back to work." Others have a more downcast view. "I'm not going to go and get a McDonald's job! Because I know I can't feed my family with that," says Irene, a 25-year-old single mother of four categorized by the researchers as "disaffected."

Among those who are working, Lewis says, "You're talking about 8 and 9 bucks an hour. You're talking about a lot of people without health insurance." And among those who aren't working, "There's clearly going to be a group of people for whom this is going to be tough. They're going to have mental illness, cognitive deficiencies, health problems.That creates a challenging situation for which policy makers must account, saysLewis.

The New Hope Project, which Duncan and other researchers conducted in collaboration with MDRC (formerly Manpower Demonstration Research Corp.), divided 1,360 participants into an experimental group and a control group to measure the results of a generous package of benefits that included a job search assistance, a time-limited community service job if no job was found, a monthly earnings supplement to bring workers' wage levels above the poverty line, and subsidized child care and health insurance, both of which were phased out at certain income levels.

The study found that parents in the experimental group worked more and earned more, and those effects continued, albeit at a diminished rate, when the experiment ended. Parents became more aware of "helping" resources in the community, such as where to find assistance with energy costs or housing problems, and the program increased children's time in formal day care settings, an outcome that has continued.

" The good news is that the child impacts are holding up at five years. The teachers continue to report that especially boys are achieving more and are better behaved," Duncan says. However, a separate multiprogram analysis that included New Hope, on which Duncan played a more supportive role, found parents of adolescents reported worse school performance, in part due to lack of supervision and in part due to extra childcare responsibilities that the adolescents took on when their mothers worked.

Gayle, a 38-year-old white single mother who was interviewed intensively as part of the multi-program analysis, expressed frustration about the slipping grades of her only daughter, Jane, who was 9 when her mother entered the study. "It's all gonna come down on me, and I'm not ready to deal with that," Gayle says. "I don't think I should be punished for that."

Tina, a 35-year-old African-American mother of six in Philadelphia, said her eldest daughter, Tamara, was consistently late to school because she had to supervise the two youngest children after Tina went to work at 7 a.m. "And what the school says to me is . . . they gotta do what they, what's their policy. She's gotta stay after school, do her detention," Tina told researchers. "We all can't be at the same place at the same time."

The three-city study that Chase-Lansdale led found positive effects on teenagers' psychological state of mind, which Duncan's study did not measure. "I think it makes sense that, as a young teenager, you're very astute about what's going on in terms of the household and finances; and if you see your mother going to work, it makes sense that your anxiety levels would go down," she says.

Some were surprised her study did not find negative effects on younger children, believing that "it's much harder for young children to be apart from their mothers," she says. While the study did not find that to be true, it did conclude that "these children in low-income families, whether they're on welfare or not, are not doing as well as children in middle-income families, both in terms of cognitive achievement and behavior problems," she adds. "That message often gets lost with this big focus on welfare reform."

Duncan and Chase-Lansdale are currently writing a paper that will reconcile the differences between their findings, which she believes relate to differences in the populations sampled, questions asked and the timing of the studies. Chase-Lansdale's colleagues at Penn State and Harvard are undertaking a qualitative analysis that will include individual interviews, she adds, but that won't be ready for several months.

Meantime, her next step is to look for breakdowns by geography, race, age and other factors in terms of how well children and families are doing. "It's ironic to us," she says. After several years of effort, "We finally had this first big paper, and we had the big home run, since 98 percent of papers submitted to Science are rejected. But still, the questions are exactly what you're asking: Well, what about the sub-groups, and aren't there some interesting patterns, and so forth. It's just the irony of science: It takes time." Ed Finkel is a freelance writer.
By Ed Finkel