Early Childhood

Experts Debate Welfare Reform’s Impact on Children

By Linda Jacobson — September 19, 2001 13 min read
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Few policy experts dispute that the federal welfare overhaul enacted five years ago has moved thousands of mothers and fathers into the workplace. The welfare rolls have been cut by more than half since 1996—from 12.2 million to 5.4 million, according to federal statistics. But have those changes helped or harmed children?

That is one of the questions Congress will begin grappling with over the next several months, as it gears up for the reauthorization of the Personal Responsibility and Work Opportunity Reconciliation Act. The law ended the federal entitlement program for poor families, put time limits on receiving public assistance, required most recipients with young children to work, and turned over many of the decisions about welfare and related child care to the states.

Even as President Clinton prepared to sign the bill in August 1996, “there were a lot of people who predicted gloom and doom, and they were wrong,” said Sheri Steisel, the director of the human services division of the National Conference of State Legislatures. “And there were others who predicted that we could totally change people’s behavior and end poverty, and that hasn’t happened either.”

In remarks on a recent report on welfare dependency, which for the first time included data for years following passage of the new law, U.S. Secretary of Health and Human Services Tommy G. Thompson concluded that families are better off now than they were before 1996. “Welfare reform is lifting people up, helping them to find jobs and succeed,” he argued.

Some data would support his statement. Not only have the nation’s welfare rolls been cut dramatically, but between 1993 and 1999, the poverty rate also declined, from 15.1 percent to 11.8 percent. During the same period, the child-poverty rate dropped from 20 percent to 15.5 percent.

And the percentage of low-income children living with two married parents remained virtually unchanged—at about 50 percent—between 1995 and 2000, stopping a trend in which single parenting was increasing for that income group, according to an analysis of U.S. Census Bureau data by the Center on Budget and Policy Priorities, a Washington think tank.

Debating the Causes

Some policy experts question how much of the good news is attributable to the welfare overhaul.

Mark Greenberg, a senior staff attorney for the Center for Law and Social Policy in Washington, points out that the improvements in the adult- and child-poverty rates—as well as signs that single parenting was not increasing—occurred during the most robust economic expansion in the nation’s history.

For now, it’s unclear how the current economic slowdown is affecting the welfare population, since statistics are available only through 1999 and 2000.

Meanwhile, Mr. Greenberg argued, most of the mothers who have left welfare have moved into low-wage jobs “with very little chance for advancement.”

Moreover, he said, it’s difficult to isolate the direct impact of the welfare overhaul because, in addition to the economic expansion of the 1990s, the nation increased the Earned Income Tax Credit for low-income Americans, expanded health-care coverage for families with financial need, and undertook stronger enforcement of child-support laws.

“There were a whole lot of things that happened at the same time that pushed in the same direction,” he said.

But other experts give the 1996 law much greater credit for the decline in the number of families on welfare.

Pointing to figures showing a 4.4 percent drop in the number of welfare recipients since September of last year, Rep. Wally Herger, R-Calif., the chairman of the Human Resources Subcommittee of the House Ways and Means Committee, said: “Low-income parents are now supporting their children with paychecks instead of welfare checks. Welfare reform has made this tremendously positive change possible.”

Mr. Herger, whose panel deals with welfare policy, also cited a recent report from the Manhattan Institute, a think tank in New York City. The report concludes that the booming economy played only a minor role in moving people from welfare to work in comparison with Temporary Assistance to Needy Families, commonly known as TANF, the welfare block grant established under the new law.

Child-Care Lessons

Regardless of the bigger picture, researchers say that studies of the welfare law’s effects are yielding some interesting lessons for educators and child-care providers.

For instance, researchers following single mothers in California as they move from welfare to work report some surprising findings about the type of child care those mothers are using for their preschool-age children.

If the mothers in the study were able to secure spaces in center-based programs, it was likely that the quality of care in those centers was quite high, as determined by researchers’ observations of the classrooms. In areas such as verbal interaction between providers and children, the supply of play and learning materials, and the condition of the facilities, the centers were found to score relatively high on a widely used rating scale for early-childhood programs.

“This is very good news for those poor families who are able to access centers and preschools,” the researchers—from the University of California, Berkeley, and Yale University—write in a paper they released in August.

But many problems within the welfare system could still be depriving children of the services they need.

To begin with, data released this year from the federal Department of Health and Human Services showed that only 12 percent of the children eligible for child-care subsidies were actually receiving them. That group included children whose parents were receiving welfare benefits as well as youngsters from low-income families that were not on welfare.

What’s more, families getting TANF aid are supposed to receive child-care assistance automatically, but because they often must jump through so many bureaucratic hoops, many families don’t even bother applying for the financial help, according to child care experts.

The findings released last month on 410 families in two California counties—San Francisco and Santa Clara—are part of a larger, ongoing study called the Growing Up in Poverty Project, which is following a sample of 948 families in California, Connecticut, and Florida as the parents move from welfare to work. The project, supported by foundation grants and federal money, involves the researchers at Berkeley and Yale, as well as others at Stanford University and Teachers College, Columbia University.

A second paper, released over the summer by researchers at Policy Analysis for California Education, a UC-Berkeley think tank, examines quality at 170 centers serving mostly low-income families in those two California counties, plus Los Angeles County. And again, the scholars found positive results on such measures as group sizes, child-adult ratios, and the educational levels of child-care directors.

California has been able to develop a “robust network of centers and preschools that displays quite high-quality,” the study’s authors say. “This, despite the fact that they are situated in quite poor neighborhoods.”

One probable reason for the high levels of quality is that many of the centers in the study are under contract with the state to serve children whose parents receive state aid to help them pay for child care, which includes parents on welfare as well as those who are working in low-wage jobs, said Gina Adams, a senior research associate at the Urban Institute in Washington. In those contractual systems, centers receive state money up front and often have to meet higher standards of quality to participate.

But only a handful of states still use such contracts. Most states have completely switched to parental-choice programs, in which parents on welfare and low-income, working parents receive vouchers to use for the child-care facilities of their choice, according to Ms. Adams. Some restrictions are attached to the use of those vouchers, depending on state policy.

States were required to make the changes after the federal child-care block grant was passed in 1990, under the first Bush administration. Among other provisions, the measure included language saying that parents should be granted choices to use any type of child care they wanted—not just child-care centers.

Under a contractual system, Ms. Adams said, child-care centers “can count on having the money at the beginning of the year. They can hire the teachers, and they can train the teachers.” That is different, she noted, from a system in which centers accept child-care vouchers from low-income parents.

The findings from the Growing Up in Poverty project are not just confined to California.

A separate paper, focusing on both Florida and California, was presented last spring at a conference sponsored by the National Institute of Child Health and Human Development. The researchers said that children who regularly attended center-based programs showed stronger cognitive growth in such areas as language skills and familiarity with print materials than children who were in child care 10 hours a week or less, or those who were placed in some type of home-based care.

When children from welfare families “spend more time in child-care centers and preschools, their developmental growth is more robust, at least in the cognitive, language, and school-readiness domains,” the researchers reported.

Beyond Work Rules

In another widely noted study, the Manpower Demonstration Research Corp., a New York City-based nonprofit organization, released an analysis earlier this year of 11 welfare-to-work initiatives.

Researchers found that children participating in the four programs that provided wage supplements to parents who worked part time or full time performed better in school than children whose mothers were required to work but didn’t receive the extra money. Those findings led many advocates for children to conclude that the sense of accomplishment parents are likely to gain simply from working might not be enough to influence their children positively.

The same study from the MDRC found that three of the 11 programs showed some subtle warning signs— specifically, negative behavior by adolescent children that might be related to their parents’ working. The three programs had different incentives: A Canadian program offered cash supplements; in Minnesota, some parents were allowed to keep more of their earnings but still receive welfare benefits; and in a Florida program, parents had to be working or in a work-training program—otherwise, they would risk losing some of their benefits.

Compared with parents who were not participating, those in the three welfare-to-work programs were slightly more likely to report that their children showed declining achievement scores and more behavior problems—such as smoking, drinking alcohol, and being suspended from school. Because the differences were so slight, the researchers involved in the study called the findings warning signs, not hard evidence that welfare reform was harmful to older children.

But some researchers suggest that a decline in the time working parents have to monitor their children, along with an increase in responsibility for the young people themselves, might be contributing to those problems.

“A key consideration for policymakers as the reauthorization of welfare reform gets under way will be how to support both the positive development of adolescents in families receiving welfare and the economic self-sufficiency of their parents,” researchers from Child Trends, a Washington research group, said in a recent paper released by the organization.

Social, Cognitive Effects

The issue of child-care quality will likely draw considerable attention when Congress takes up the welfare reauthorization next year, because welfare recipients who are required to work cannot stay at home to care for their children. With the help of welfare caseworkers, the parents must find their own child-care arrangements.

Yet Ron Haskins, a senior fellow at the Brookings Institution in Washington who follows those issues, said it would be difficult to have a debate about child-care quality because the research findings are not conclusive.

Even so, the National Institute of Child Health and Human Development released findings last April that are likely to add fuel to the debate over whether children are better off in child-care settings or in the care of their parents.

The data, gleaned from the NICHD’s ongoing Study of Early Child Care and Youth Development, which included children of all income levels, showed that 17 percent of children who spent more than 30 hours a week in child care by the time they were 41/2 years old were rated as more aggressive toward other children in kindergarten than youngsters who had spent less time in child care. (“Study Says More Time in Child Care Connected to Bad Behavior,” April 25, 2001.)

Jay Belsky, one of the study’s principal investigators and a professor at the University of London, described that group of children as moody, argumentative, even explosive. In response to those findings, he concluded that less time in child care is better for children.

But other researchers involved in the project publicly disagreed with Mr. Belsky’s assessment. They argued that the problems fell into what experts consider the normal range of behavior for children. Those disagreements were aired in the news media and rekindled the politically volatile debate over whether young children are harmed by being cared for during the week by someone other than their mothers or fathers.

Other interesting findings of the NICHD study did not generate as many headlines. For instance, researchers found that children who attended child-care centers had more advanced cognitive and language skills than those who were in other types of child care.

While the “Growing Up in Poverty” study doesn’t specifically report child outcomes, Bruce Fuller, a professor of education at UC-Berkeley and the director of Policy Analysis for California Education, the think tank there, said it’s “safe to say that fairly higher quality translates into higher cognitive growth.”

He added that while he and the other researchers had not yet analyzed specific outcomes for the social development of the low-income children in their study, “we haven’t found what Belsky was alleging.”

The recent studies from Mr. Fuller and the other researchers who tracked single mothers who were on welfare also pinpoint room for improvement at the California centers serving those families. And those findings are likely to apply to many other child-care centers in poor communities.

Many Prefer Informal Care

To begin with, the evaluations indicated that staff members needed to spend more time reading to children and helping them acquire problem-solving skills. The researchers also found that the quality of the centers in the California counties declined as the average income in the community increased and as families thus were less likely to qualify for subsidies.

In addition, they found consistently lower quality in family child-care homes and in informal child-care arrangements, such as supervision of children by friends or relatives. Even so, many mothers in the sample still said they preferred informal providers because those arrangements offered more flexible hours—and, beyond that, many mothers believed that those providers gave their children more individual attention than teachers in child-care centers could.

On that note, the authors of the California study suggest that “state and local officials might learn from mothers’ positive views of home-based arrangements.”


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