Family economic resources in the post-reform era.

SUMMARY Aided by the longest economic expansion in U.S. history and other policy changes designed to make work pay, federal welfare reform legislation has spurred mothers to leave welfare at an unprecedented rate. The majority of mothers who left welfare are working, but most have jobs with low pay and limited benefits. This article discusses the relationship between economic resources and child well-being, and how family economic resources have changed under welfare reform. A survey of the research conducted since reform indicates the following: * Families' economic resources clearly matter to child well-being, but the connections are complex and vary by the age of the child. * Without the benefit of supports designed to "make work pay," many families working full time at the minimum wage have resources beneath the poverty line, and the poverty line itself falls substantially short of the needs of most working families. * Although poverty overall has declined under welfare reform, a significant segment of families are worse off--in part because after leaving welfare, many families do not receive other government supports designed to help them. Most states are still struggling to design more effective systems for delivering supports to help low-income working families move out of poverty. The author cautions that the evolving story of welfare reform will need to be monitored carefully to achieve long-term positive impacts on family economic resources and child well-being. ********** Federal welfare reform legislation, passed in August 1996, ushered in a new era in U.S. history of providing support for vulnerable families with children. The law replaced entitlements to cash assistance with fixed block grants to states under a new program titled Temporary Assistance for Needy Families (TANF). (See the article by Greenberg and colleagues in this journal issue.) Aided by the longest economic expansion in U.S. history and other policy changes designed to make work pay, the new legislation hastened an already rapid decline in welfare caseloads and left states with considerable federal funds to use in new ways to help low-income working families. It is not yet clear how federal welfare reform ultimately will affect family and child well-being. The majority of mothers who left welfare are working, but most have jobs with low pay and limited benefits. Proponents of reform argue that mothers who rely on work rather than welfare provide better role models for their children, achieve greater self-esteem, and, in time, are likely to move up the economic ladder. Opponents caution that children will fare worse unless working mothers can earn enough to support their families. Most families will need help paying for child care, transportation, housing, and health expenses. Welfare reform is still evolving as families adjust to new expectations and new support packages, and as states adjust to their new responsibilities in setting the basic safety net for low-income families with children. This article examines the relationship between economic resources and child well-being, and how family economic resources are changing as a result of reform. A description of federal and state policies that help to make work pay is provided, followed by a summary of the research describing former welfare recipients' earnings, incomes, and government supports. A final section reviews state initiatives that provide new types of non-cash assistance for working poor families to help close the gap between the apparent benefits offered to these families and what they actually receive. Economic Resources and Child Well-Being: What Is the Connection? The preamble to the federal welfare reform bill focuses on the goals of marriage and responsible fatherhood and motherhood as integral to "successful child rearing and the well-being of children. …