Many people criticized recent welfare policy because it reduced work effort and encouraged the break-up of families. The individual finds that higher earnings from work cause the transfer to fall due to the effect of the transfer reduction rate. Therefore, work hours are scaled back or eliminated. If the amount of the no-work transfer is large enough, the individual may decide not to work at all. Transfer programs also contribute to the break up of the family.
Public assistance provides unhappy couples the means to establish separate households.
Still, evidence indicates that public assistance is not a major cause of the growth of female-headed families. The percentage of female-headed families grew in the 1970s and 1980s despite a 42 percent drop in the real value of public assistance. One study estimates that public assistance accounted for only 5 percent to 14 percent of the growth of female headed households from 1960 to 1975. In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act. The purpose was to provide incentives for welfare recipients to find employment.