The Welfare Myth: Disentangling the Long-Term Effects of Poverty and Welfare Receipt for Young Single Mothers

Abstract

This study investigates the effects of receiving welfare as a young woman on long-term economic and marital outcomes. Specifically, we examine if there are differences between young, single mothers who receive welfare and young, single mothers who are poor but do not receive welfare. Using the 1968-1997 Panel Study of Income Dynamics, our findings suggest those who receive welfare for an extended period as young adults have the same pre-transfer income over a 10 to 20 year period as those who are poor but do not receive welfare as young adults. While we found some differences between the two groups in income levels and the likelihood of having relatively low income when control variables were not included in our models, once appropriate controls were used, these differences became statistically insignificant. The only statistically significant difference found between the two groups in our 10, 15, and 20 year models was the likelihood of being married in year 15. Our results indicate that it is income level as a young adult, as well as such factors as the unemployment rate in the area of residence, but not welfare receipt, that affect long-term income and marital outcomes.

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