Order Code RL30797 Trends in Welfare, Work, and the Economic Well-Being of Female-Headed Families with Children: 1987-2006 Updated January 29, 2008 Thomas Gabe Specialist in Social Policy Domestic Social Policy Division Trends in Welfare, Work, and the Economic Well-Being of Female-Headed Families with Children: 1987-2006 Summary More than a decade has passed since repeal of the nation’s major cash welfare program assisting low-income families with children and its replacement with a program of Temporary Assistance for Needy Families (TANF). TANF ended the 61year-old federal entitlement program to poor families with children, Aid to Families with Dependent Children (AFDC). A major purpose of TANF is to end dependence of needy families on government assistance by limiting the time they may receive federal assistance (five-year maximum, or fewer years under state option), and by promoting job preparation, work, and marriage. TANF gives states increased flexibility to design programs to assist needy families with children over what existed under AFDC. The majority of families assisted by TANF, and its predecessor AFDC program, are poor and low-income single-parent families, headed mostly by women. This report examines trends in welfare, work and the economic well-being of female-headed families with children, the principal group affected by the replacement of AFDC with TANF. The report presents analysis of 20 years of U.S. Census Bureau Current Population Survey (CPS) data, the principal source of information for U.S. family income and poverty statistics. The analysis spans the run-up in welfare caseloads that began in 1989 to reach an all-time high in 1994, and the historic caseload declines that have since followed. Over the period studied, a variety of economic, demographic, and public policy and program changes, besides TANF, are likely to have affected welfare, work and the economic well-being of singlemother families. This report does not attempt to untangle these possible effects. The analysis shows that there has been a dramatic transformation with regard to welfare, work and poverty status of single mothers over the past 20 years. Many of these changes began before the passage and implementation of TANF, but have continued, perhaps to an even greater extent, since. The analysis shows that single mothers are more likely to be working in recent than in past years, and that they are less likely to receive cash welfare or to be poor. However, reductions in poverty have not been as large as the large declines in welfare and the increased rates of work that have occurred. The analysis indicates that welfare receipt rates among poor families headed by single mothers have dropped considerably. Among single mothers whose incomes place them in the bottom fifth of all such mothers, income from earnings supplemented by the Earned Income Tax Credit (EITC) has grown markedly since 1993, but has been insufficient to offset concurrent losses in cash welfare and food stamp benefits. While single mothers are less dependent on welfare in most recent than in past years, increased work has not resulted in marked gains in net income for these lowest-income families. The report suggests that full-time full-year work may be necessary, but not sufficient, to raise single mothers’ family incomes above poverty. U.S. income support policy will continue to be challenged to promote economic self-support through work and to reduce poverty and welfare dependency among families headed by single mothers. This report will be updated annually, when new Census Bureau data are released. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Single Mothers’ Employment Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Welfare Receipt Among Single Mothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Poor Single Mothers’ Work and Welfare Status . . . . . . . . . . . . . . . . . . . . . . . . . 12 Effects of Earnings, Transfers, and Taxes on Single Mothers’ Poverty Status . . 14 Effect of Earnings and Other Nonwelfare Cash Income on Poverty . . . . . . 16 Effect of Cash Welfare on Poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Effect on Poverty of Counting Selected Income Sources Not Included in the “Official” Poverty Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Effect of Food Stamps on Poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Effect of Taxes and Tax Credits on Poverty . . . . . . . . . . . . . . . . . . . . 17 Effect of Unrelated Household Member’s Income on Poverty . . . . . . 17 Degree of Poverty Among Poor Single Mothers . . . . . . . . . . . . . . . . . . . . . . . . . 18 Sources and Level of Income Among Lower-Income Single Mothers . . . . . . . . 20 Conclusions and Policy Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Appendix A: Cash Welfare Under-Reporting on the CPS . . . . . . . . . . . . . . . . . 29 Appendix B: Family Income to Poverty Ratios: Cutoffs for Income Quintiles . 31 Appendix C: Support Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Data Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 List of Figures Figure 1. Single Mothers: Poverty and Cash Welfare Receipt, 1987 to 2006 . . . 5 Figure 2. Welfare, Work and Poverty Status Among Single Mothers, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Figure 3. Employment Rates of Single and Married Mothers, by Age of Youngest Child, March 1988 to March 2007 . . . . . . . . . . . . . . . . 7 Figure 4. Single Mothers: Cash Welfare Recipiency Rates, by Pre-Transfer Income* Poverty Status, 1987 to 2006 . . . . . . . . . . . . . . . . 9 Figure 5. Cash Welfare Recipiency Rates Among Single-Mother Families, by Pre-Transfer Income* Poverty Status, 1987 to 2006 . . . . . . . . . . . . . . . 10 Figure 6. Food Stamp Recipiency Rates Among Single Mothers, by Household Income Relative to Household Low-Income Threshold, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Figure 7. Poor Single Mothers: Work and Welfare Status During the Year, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Figure 8. Effects of Earnings, Transfers and Taxes on Family Poverty and Household Low-Income Status of Single Mothers, 1987 to 2006 . . . . 15 Figure 9. Poverty Gap* Percentiles Based on Cash Income Among Poor Single-Mother Families, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . 19 Figure 10. Poverty Gap* Percentiles Based on Net After-Tax Cash Income (Including the EITC) and the Value of Food Stamps, Among Poor Single-Mother Families, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Figure 11. Bottom Income Quintile* of Single-Mother Families: Average Annual Income by Source, 1987 to 2006 (in 2006 dollars) . . . . . . 23 Figure 12. Second Income Quintile* of Single-Mother Families: Average Annual Inocme by Source, 1987 to 2006 (in 2006 dollars) . . . . . . 24 Figure 13. Working Single Mothers’ Job Attachment, by Welfare and Poverty Status: 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Figure 14. Hourly Wage Rates* of Working Single Mothers in March 2007, by Welfare and Poverty Status in 2006 (Median and Inter-Quartile Range) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Figure 15. AFDC/TANF Cases: CPS Estimates Versus Administrative Caseload Counts (Annual Monthly Average), 1987 to 2006 . . . . . . . . . . . . 29 Figure B-1. Income to Poverty Percentiles of Mother-Only Families Based on Ranking of Families by Family Cash Income Relative to Family Poverty Income Thresholds, 1987 to 2006 . . . . . . . . . . . . . . . . . 32 Figure B-2. Income to Poverty Percentiles of Mother-Only Families, Based on Ranking of Families by Combined After-Tax and Food Stamp Income Relative to Family Poverty Income Thresholds, 1987 to 2006 . . . . 33 Figure B-3. Income to Poverty Percentiles of Mother-Only Families Based on Ranking of Families by Household Combined After-Tax and Food Stamp Income Relative to Household Poverty Income Thresholds, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 List of Tables Figure A-1. Support Table 1. AFDC/TANF Cases: CPS versus Administrative Caseload Counts, Annual Monthly Average, 1987 to 2006 . . . . . . . . . . . . 30 Figure B-1 Support Table. Income to Poverty Percentiles of Mother-Only Families Based on Ranking Families by Family Cash Income Relative to Family Poverty Income Thresholds, 1987 to 2006 . . . . . . . . . . . . . . . . . 35 Figure B-2 Support Table. Income to Poverty Percentiles of Mother-Only Families Based on Ranking of Families by Combined After-Tax and Food Stamp Income Relative to Family Poverty Income Thresholds, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Figure B-3 Support Table. Income to Poverty Percentiles of Mother-Only Families Based on Families Ranked by Household Combined After-Tax Food Stamp Income Relative to Household Poverty Income Thresholds, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Figure 1 Support Table. Single Mothers: Poverty and Cash Welfare Receipt, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Figure 2 Support Table. Welfare, Work and Poverty Status Among Single Mothers, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Figure 3 Support Table. Employment Rates of Single Mothers and Married Mothers by Age of Youngest Child, March 1988 to March 2007 . . . . . . . . 41 Figures 4 and 5 Support Table. Single-Mother Family Cash Welfare Recipiency Rates, by Pre-Transfer Income Poverty Status,* 1987 to 2006 . . . . . . . . . . 42 Figure 6 Support Table. Food Stamp Recipiency Rates Among Single-Mother Families, by Household Income Relative to Household Poverty Threshold, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Figure 7 Support Table. Poor Single Mothers: Work and Welfare Status During the Year, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Figure 8 Support Table. Effects of Earnings, Transfers, and Taxes on Family Poverty and Household Low-Income Status on Single Mothers, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Figure 9 Support Table. Poverty Gap Percentiles* Based on Cash Income Among Poor Single-Mother Families, 1987 to 2006 . . . . . . . . . . . . . . . . . . 46 Figure 10 Support Table. Poverty Gap Percentiles* Based on Cash Income, Food Stamps, and Net Taxes Including the EITC Among Poor Single-Mother Families, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Figure 11 Support Table. Bottom Income Quintile* of Single Mother Families: Average Annual Income by Source, 1987 to 2006 . . . . . . . . . . . . . . . . . . . 48 Figure 12 Support Table. Second Income Quintile* of Single Mother Families: Average Annual Income by Source, 1987 to 2006 . . . . . . . . . . . . . . . . . . . 49 Trends in Welfare, Work, and the Economic Well-Being of Female-Headed Families with Children: 1987-2006 Introduction More than a decade has passed since repeal of the nation’s major cash welfare program assisting low-income families with children and its replacement with a program of Temporary Assistance for Needy Families (TANF). TANF, signed into law as part of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (P.L. 104-193), replaced the 61-year-old Aid to Families with Dependent Children (AFDC) program, a federal entitlement program to low-income families with children. TANF eliminated the federal entitlement to assistance that existed under AFDC, replacing an open-ended matching grant program with a fixeddollar block grant program and imposing a maximum five-year lifetime limit receipt of federally-funded assistance (states may impose shorter limits than the maximum). TANF gives states increased flexibility to design programs to assist needy families with children over what existed under its predecessor program. A major purpose of TANF is to end dependence of needy families on government assistance by limiting the time they may receive assistance, and by promoting job preparation, work, and marriage. The majority of families assisted by TANF, and its predecessor AFDC program, are poor and low-income single-parent families, headed mostly by women. This report examines trends in welfare, work and economic well-being of female-headed families with children, the principal group affected by the replacement of AFDC with TANF. The report presents data from Congressional Research Service (CRS) analysis of U.S. Bureau of the Census March Current Population Survey (CPS), the principal source of information for U.S. family income and poverty statistics. The analysis is based on CPS data collected from March 1988 to March 2007. The earliest year’s data precedes the passage of the Family Support Act of 1988 (P.L. 100-485), the last major nationwide reform to the AFDC program prior to its repeal under TANF. The data series begins before the most recent run-up in cash welfare caseloads that occurred under AFDC in the late-1980s and early 1990s. It captures the caseload increase to its peak, in 1994, and the historic caseload decline that followed. Over the period examined in this report, a variety of economic and demographic factors, and policy interventions are generally thought to have affected cash welfare caseloads. Increased numbers of single-mother families, especially never-married mothers who are prone to poverty and receipt of welfare, as well as the ill effects of an economic recession (July 1990 to March 1991) are generally thought to have CRS-2 contributed to the increase in the AFDC caseload from mid-1989 to March 1994.1 The 10-year long economic expansion (from March 1991 to March 2001), the longest in U.S. history, presented a most favorable economic climate to provide jobs to mothers who otherwise might rely on welfare, and is considered to have contributed to declines in welfare caseloads. The economic recession that followed (March to November 2001) is likely to have contributed to the subsequent leveling off of TANF caseloads2 and increases in Food Stamp program caseloads. A variety of welfare policy interventions are likely to have affected welfare caseloads by conditioning benefits on new behavioral requirements. For example, the 1988 Family Support Act extended work requirements (which could include work preparation activities, such as education and training) from mothers with a child as young as 6 to mothers with a child as young as 3. (Under the law, states had the option of extending work requirements to mothers with a child as young as 1.) In the years immediately preceding passage of the 1996 welfare law, states experimented with changes to welfare policy under waiver authority granted to the Secretary of the Department of Health and Human Services (DHHS).3 Among the features of state programs tested under waiver authority granted by the Secretary were efforts to strengthen work requirements, experiments requiring a “work first” approach rather than “training first, followed by work,” time limits, strengthened sanctions for noncompliance with welfare rules, and capping of welfare benefits for a new baby conceived or born while a mother was receiving welfare. After the passage of the 1996 welfare reform law, many states adopted these and many other approaches first tried under welfare waivers. In addition, a number of other policy interventions are generally thought to have promoted work compared to welfare over the period examined in this report. Expanded eligibility and funding for child care has helped make work possible for mothers who otherwise might have difficulty finding child care. For example, the 1988 Family Support Act expanded eligibility for child care assistance in the form of transitional child care assistance for families working their way off AFDC. In 1990, federally funded child care assistance was extended to low-income families deemed to be at risk of receiving welfare under the Child Care and Development Block Grant (CCDBG).4 Expansions to the Earned Income Tax Credit (EITC) in 1990 (phased-in 1991 and 1992) and in 1993 (phased-in 1994 through 1996) expanded the credit’s “work bonus” to families with children, amounting to as much 1 See for example, CRS Report 93-7, Demographic Trends Affecting Aid to Families with Dependent Children (AFDC) Caseload Growth, by Thomas Gabe (archived report, available upon request); and Peskin, Janice. Forecasting AFDC Caseloads, with an Emphasis on Economic Factors. Congressional Budget Office Staff Memorandum, July 1993. 2 See CRS Report RL32760, The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions, by Gene Falk. 3 Section 1115 of the Social Security Act grants the Secretary authority to waive compliance of states with certain sections of the Social Security Act for state experiments or demonstrations which the Secretary judges to promote specific objectives of the act. 4 See CRS Report RL30785, The Child Care and Development Block Grant: Background and Funding, by Melinda Gish. CRS-3 as 40 cents on each dollar earned for a low-income family with two children.5 Over the period examined in this report, the minimum wage was increased four times.6 Additionally, most states allowed inflation to substantially erode the real value of welfare benefits over this period, diminishing the value of welfare relative to work.7 Furthermore, since the passage of TANF, most states have increased financial work incentives for families receiving cash assistance by allowing families to keep more of their cash welfare benefit as their earnings increase.8 Untangling the effects of demographic factors, the economy, welfare policy and other policy interventions on single-mothers’ work behavior, welfare receipt, income, and poverty status, is beyond the scope of this report. Others have attempted to parcel out these effects with mixed success and differing conclusions as to the relative impacts of each.9 In contrast to these efforts, this report is intended to simply describe changes in single mothers’ welfare, work, income and poverty status that have occurred over the past 20 years. The analysis which follows relies on data from the U.S. Bureau of the Census Annual Social and Economic Supplement (ASEC) to 5 For a description of the EITC, see CRS Report RL31768, The Earned Income Tax Credit: An Overview, by Christine Scott. For an analysis of the possible effects of the EITC on welfare receipt and mothers’ work, see Meyer, Bruce D., and Dan T. Rosenbaum. Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers. NBER Working Paper No. 7363, September 1999. (Hereafter cited as Meyer and Rosenbaum, Welfare, the Earned Income Tax Credit.) 6 The federal minimum wage increased from $3.35 per hour to $3.80 per hour, effective April 1990, to $4.25 per hour, effective April 1991, to $4.75 per hour, effective October 1996, and $5.15 per hour, effective September 1997. For an analysis of possible effects of minimum wage increases on welfare participation, see Turner, Mark. The Effects of Minimum Wages on Welfare Recipiency. Paper presented at the National Association for Welfare Research and Statistics, August 1998. 7 Maximum TANF benefits available for a family of three in the median state in January 2005 were 32% below the maximum level available to a family under AFDC in January 1987, after adjusting for the effects of price inflation. In only one state (Alabama) were TANF benefits higher in January 2005 than in January 1987. 8 For a discussion of changes in work incentives under TANF compared to AFDC see CRS Report RL30579, Welfare Reform: Financial Eligibility Rules and Cash Assistance Amounts under TANF, by Craig Abbey. (Archived report, available upon request.) 9 See, for example, Council of Economic Advisors, Technical Report: Explaining the Decline in Welfare Receipt, 1993-1996, A Report by the Council of Economic Advisers, Washington, D.C., April 1997, and Technical Report: The Effects of Welfare Policy and the Economic Expansion on Welfare Caseloads: An Update, A Report by the Council of Economic Advisers, Washington, D.C. August 1999; Ziliak, James P., Figlio, David N., Davis, Elizabeth E., and Connolly, Laura S. “Accounting for the Decline in AFDC Caseloads, Welfare Reform or the Economy? The Journal of Human Resources, vol. XXXV, no. 3, pp. 570-586. Moffitt, Robert A. “The Effect of Pre-PRWORA Waivers on AFDC Caseloads and Female Earnings, Income, and Labor Force Behavior, in Economic Conditions and Welfare Reform.” Danziger, Sheldon (ed.), Kalamazoo, Mich. W.E. Upjohn Institute for Employment Research, 1999; O’Neill, June E. and Hill, Anne M. “Gaining Ground? Measuring the Impact of Welfare Reform on Welfare and Work.” Civic Report No. 17., Manhattan Institute, New York, New York, 2001. CRS-4 the CPS.10 Over the period examined, the CPS/ASEC data provides a comparatively consistent approach for assessing changes in the economic status of single-mothers and their families. The CPS/ASEC asks questions about family composition in March, family members’ labor force and employment status in the month, and retrospective accounting of income and labor force participation during the prior year. The data presented in this report capture family composition from March 1988 to March 2007, and family income and poverty status from 1987 to 2006, providing a representative cross-section of families headed by single mothers in each year.11 Overview CPS data show an increase in cash welfare receipt (AFDC, TANF, or other assistance) among single mothers during the late 1980s and early 1990s and a decrease in the mid-to-late 1990s. The CPS data generally correspond to the caseload rise and fall documented by administrative program data, but underestimate the caseload statistics to some extent.12 Figure 1 shows that the total number of single mothers increased from 8.4 million in 1989, to about 9.9 million in 1993, an increase of 1.5 million, or 17%. From 1993 through 2000, the number of single mothers remained fairly stable, ranging between 9.7 and 10.1 million. Since 2000, the number of single mothers has increased by over one million, from 10 million in 2000, to 10.9 million in 2006. The number of single mothers in families reporting receipt of cash welfare on the CPS increased from 2.5 million in 1989, to 3.4 million in 1993, an increase of 900,000, or 36% over the four-year period. Compared to 1993, the peak year of welfare receipt, the number of single mothers reporting cash welfare was down to just under one million (991,000) in 2006 — a 71% decline from 1993 (the bottomshaded portion in Figure 1).13 Over the same period, the number of poor single mothers who reported receiving no cash welfare increased from 1.722 million in 1993 to 3.120 million in 2006 — an 81% increase over the period (the middle-shaded area in Figure 1). 10 The CPS/ASEC was formerly known as the March Supplement to the Current Population Survey, as data for the social and economic supplement were collected in March of each year. Beginning in 2001, the Census Bureau expanded the CPS sample for collecting social and economic supplementary data to include some households interviewed in February and April. Most of the households in the ASEC are still interviewed in March, and estimates for the full ASEC continue to be controlled to independent population estimates for March. 11 Unlike longitudinal surveys, the CPS does not follow the same families from year to year. Longitudinal surveys allow for the study of how individual families’ circumstances change over time. 12 13 See Appendix A, which compares CPS estimates to AFDC/TANF caseload counts. Administrative caseload statistics show the caseload as peaking in March 1994, with nearly 5.1 million cases. By March 2006, the caseload had dropped to 1.8 million cases; a 65% decline from its March 1994 peak. CRS-5 Figure 2 provides an overview of single mothers’ welfare, work and poverty status from 1987 to 2006. The figure shows that since 1993, the share of single mothers who worked at some time during the year has increased markedly and that the share who received cash welfare (AFDC or post-1996 TANF) has declined significantly, as has the share who are poor under the official poverty definition.14 The figure illustrates that while both cash welfare recipiency rates and poverty rates for single mothers have generally fallen since 1993, single mothers’ welfare recipiency rate has fallen faster than their poverty rate. More recently, since 2000, the poverty rate of single mothers has increased, but cash welfare receipt has not. A growing share of single mothers are poor, but are receiving no cash welfare assistance. Figure 1. Single Mothers: Poverty and Cash Welfare Receipt, 1987 to 2006 Number (in millions) 11 10 9 8 Neither poor nor receiving cash welfare 7 6 5 4 3 Poor, but not receiving cash welfare 2 Receiving cash welfare, including those who are not poor 1 0 r 87 988 989 990 991 992 993 994 995 996 997 998 999 00 01 002 003 004 005 006 19 1 1 1 1 1 1 1 20 1 2 1 2 1 2 1 2 1 2 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. 14 The “official” U.S. Census Bureau definition counts cash, pre-tax, income against poverty thresholds that vary by family size and composition. In 2006, for example, a single mother with one child would be considered poor if her income were below $13,896, and if she had two children, below $16,242. CRS-6 Figure 2 shows that during the 1987 to 1993 period, the share of single mothers who worked at any time during the year held steady, at just below 70% in most years; since 1993, the share working increased each year until reaching 83% in 2000. The share of single mothers working dropped to just over 77% in 2006. During the 1987 to 1993 period, roughly one out of three single mothers received cash welfare. In 1993, the most recent peak year of welfare receipt on the CPS, about 35% of single mothers received cash welfare; since then the cash welfare receipt rate has declined substantially. In 2006, only about 9% of single mothers received cash welfare — just about one-quarter of the1993 rate. The figure shows that the poverty rate among single mothers fell from about 45% in 1993 to about 32% in 2000. Since 2000, the poverty rate of single mothers has increased to35%. Figure 2. Welfare, Work and Poverty Status Among Single Mothers, 1987 to 2006 100% Percent Percent 100% 90% 90% Single mothers who worked at any time during the year 80% 80% 70% 70% 60% 60% 50% 50% Poverty rate 40% 40% 30% * * * * * * * * Received cash welfare but did not work during year * 20% * 30% Received cash welfare during the year * 10% Worked and received cash welfare during year * 20% * * * * * * * * 10% 0% 0% 19 r 87 988 989 990 991 992 993 994 995 996 997 998 999 00 001 002 003 004 005 006 2 2 2 2 2 2 1 20 1 1 1 1 1 1 1 1 1 1 1 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-7 Single Mothers’ Employment Rates While welfare receipt has declined, dramatic gains in single mothers’ employment have occurred since 1993. Figure 3 shows employment rates of single and married mothers by age of youngest child in March, from 1988 to 2007 The chart shows that gaps that had existed between single and married mothers’ employment have virtually been eliminated in recent years, with single mothers now being more likely than their married counterparts to be working. Figure 3. Employment Rates of Single and Married Mothers, by Age of Youngest Child, March 1988 to March 2007 Percent employed Percent employed 100% 100% 95% 90% 90% 85% 80% 80% Age 6 to 17 75% 70% 70% Age 3 to 5 65% 60% 60% Under age 3 55% 50% 50% 45% 40% 40% 35% 30% 30% Married mothers 25% Single mothers 20% 20% 15% 10% 10% 5% 0% 0% r 88 989 990 991 992 993 994 995 996 997 998 999 000 02 003 004 005 006 007 008 009 01 19 1 1 1 1 1 1 1 1 1 1 1 2 20 2 2 2 2 2 2 2 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. The increase in employment among single mothers with young children has been most dramatic. Among mothers with a child under the age of 3, their employment rate increased from a recent low of 35.1% in March 1993 to a high of 59.1% in March 2000, a 24 percentage point increase over the period. Their employment rate fell to 53.7% in March 2005 but rebounded to 57.0% in March 2006 and fell slightly in March 2007, to 56.5%. Single mothers with a youngest child aged 3-5 also experienced marked employment gains over the mid-to-late 1990s. Their employment rate grew from a recent low of 54.1% in March 1992, to 72.7% by CRS-8 March 2000, an 18.6 percentage point increase over the period. By March 2007, the employment rate of single mothers with a youngest child aged 3-5 was 68.6%, still about 4 percentage points less than its March 2000 peak, but 5.6 percentage points above that of their married counterparts (63.0%). Single mothers whose youngest child was of school age (age 6-17) had employment rates about equal to those of their married counterparts over the 1988-2006 period. A healthy economy during much of the 1990s, combined with a transformed welfare system, improvements to the EITC, and increases in the minimum wage, are among factors thought to have encouraged work among single mothers. TANF, and the AFDC waivers that preceded it, transformed cash assistance from a needs-based entitlement to a program of temporary assistance, encouraging work and personal responsibility. Imposition of work requirements, time limits, and sanctions, and in most states, more generous earnings disregards, all serve to encourage work, either in lieu of welfare or, for a temporary period, in conjunction with welfare. The EITC, which is conditioned on earnings, is thought to encourage work among most groups, especially single parents who were not working, or who were marginally attached to the labor market. Increases in the EITC, passed by Congress in 1993 and phased in between 1994 and 1996, have increased the financial incentive for single mothers to work.15 Other factors, such as increased funding for child care subsidies, may also have contributed to making work possible for more single mothers. Given their greater attachment to the work force in recent years, one might expect single mothers to be more severely impacted by downturns in the economy than in years past. Evidence from the most recent recession (March to November 2001) shows a declining employment rate and increased incidence in poverty among single mothers since 2000. The employment rate among single mothers has yet to rebound seven years after having reached a historic high, and their poverty rate has yet to show significant movement back toward it historic low, reached seven years ago. In contrast, in the previous recession (July 1990 to March 1991), single mothers also experienced declining employment and an increased incidence in poverty (although their employment rate was lower and their poverty rate higher than today). However, in the previous recession, employment rebounded sooner (after three years), and the poverty rate increase abated within two years, and began to fall once again after three. Welfare Receipt Among Single Mothers Figure 4 shows that cash welfare recipiency rates among single mothers overall, and among poor single mothers based on their pre-transfer income (i.e., cash income excluding cash welfare), remained fairly steady during the 1987-1993 period, but have fallen considerably since. Among single mothers overall, about one-third received cash welfare during the late-1980s and early 1990s, with a low of about 30% in 1989 and a peak of about 35% in 1993. Cash welfare recipiency rates among 15 Meyer and Rosenbaum, in Welfare, the Earned Income Tax Credit, op. cit., attribute 60% of the increase in single mothers weekly and annual employment between 1984 and 1996 to the EITC. CRS-9 single mothers began to fall after 1993, falling to 10% in 2002 — a drop in the rate from nine years earlier of more than two-thirds. With the exception of 2003, cash welfare recipiency rates have remained around 10% since 2002. The apparent rise in the 2003 recipiency rate may be an aberration in CPS measurement, as administrative caseload data showed no such increase. See Appendix A for further discussion of CPS and administrative data caseload trends. In 2006, only about 9% of single mothers were receiving cash welfare. Recent declines in cash welfare recipiency rates have not simply been due to diminished need for assistance, as recipiency rates have fallen even among mothers who would appear to be in economic need, based on their pre-transfer income relative to poverty. For example, Figure 4 shows that among single mothers who were poor based on their pre-transfer cash income (i.e., income before counting cash welfare), the share who received cash welfare generally held relatively steady, around 63%, in most years over the 1987-93 period. Since 1993, the cash welfare recipiency rate among single mothers with pre-transfer income below poverty has fallen dramatically. In 2006, only about one in five (20.2%) single mothers with pretransfer income below poverty received cash assistance. Figure 4. Single Mothers: Cash Welfare Recipiency Rates, by Pre-Transfer Income* Poverty Status, 1987 to 2006 100% Percent Percent 100% 90% 90% 80% 80% 70% 60% Cash welfare recipiency rate among single mothers with pre-transfer income* below poverty 70% 60% 50% 50% 40% 40% 30% 20% 30% Cash welfare recipiency rate all single mothers 20% 10% 10% 0% 0% r 87 988 989 990 991 992 993 994 995 996 997 998 999 00 001 002 003 004 005 006 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 19 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Pre-transfer income is cash income other than cash welfare payments. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-10 Figure 5 shows cash welfare recipiency rates in greater detail by families’ level of financial need, as measured by families’ levels of pre-transfer income relative to poverty. The figure shows that cash welfare recipiency rates have fallen considerably in recent years even among single mothers who might be considered especially needy by having very low levels of pre-transfer income relative to poverty. For example, the top line of Figure 5 shows that nearly 90% of single mothers with no pre-transfer income reported receiving cash assistance from 1987 to 1990. However, after 1990 the reported rate of cash welfare recipiency among this group began drifting downwards, falling to 77% by 1996, and afterwards falling abruptly to just 35% by 2001. In 2002 and 2003, there was a marked increase in cash welfare receipt for this group (up to 44.2% in 2003), but by 2006, cash welfare receipt for this group dropped to 31%. Similarly, for single mothers with very low pre-transfer income relative to poverty (below 25% of poverty), and for families with pre-transfer incomes between 25 and 50% of poverty, cash welfare recipiency rates also show dramatic declines after 1996: for the former group from 72% in 1996 to 29% in 2006, and for the latter group from 60% in 1995 to 23% in 2005 and 2006. Figure 5. Cash Welfare Recipiency Rates Among Single-Mother Families, by Pre-Transfer Income* Poverty Status, 1987 to 2006 Percent receiving cash welfare 100% 90% $0 in pre-transfer income 80% 70% Pre-transfer income > $0 but below 25% of poverty 60% 50% Pre-transfer income between 25% and 50% of poverty 40% 30% Pre-transfer income between 50% and 100% of poverty 20% 10% 0% r 87 988 989 990 991 992 993 994 995 996 997 998 999 00 001 002 003 004 005 006 2 2 2 2 2 1 1 2 1 1 1 1 1 1 1 1 1 1 19 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Pre-transfer income is cash income other than cash welfare payments. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-11 Likewise, food stamp recipiency rates among low-income households have also fallen in recent years, although the declines have not been as dramatic as the declines in cash welfare recipiency rates shown above. Figure 6 shows that in 1994, 71% of single-mother families with household income below 130% of poverty (the Food Stamp Program’s gross income qualifying limit) reported receiving food stamp benefits; by 2000 the share had fallen to about 50%, but has increased since, reaching 57% in 2004, and then falling to 56.1% in 2005, and to 54.2% on 2006. Among those with household incomes below 50% of the low-income threshold in 1994, 80% reported food stamp receipt; in 2001 just 61% reported food stamp receipt; by 2004, their food stamp recipiency rate had increased to 68.2%, and stood at 66.9% in 2006. Figure 6. Food Stamp Recipiency Rates Among Single Mothers, by Household Income Relative to Household Low-Income Threshold, 1987 to 2006 100% Food stamp recipiency rate 90% 80% Household income as a % of low-income threshold: 70% Less than 50% 60% Less than 130% 50% 50% to less than 130% 40% 30% 20% 10% 0% 19 87 988 989 990 991 992 993 994 995 996 997 998 999 00r 001 002 003 004 005 006 1 1 1 1 1 1 1 1 1 1 1 1 20 2 2 2 2 2 2 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-12 CPS statistics do not capture the full impact of the 2001 recession (March to November 2001) on food stamp caseloads. Food Stamp program statistics indicate that in FY2006, food stamp caseloads were up 55% from FY2000.16 To at least some extent the declining cash welfare and food stamp recipiency rates shown in Figures 4 through 6 are likely due to increased under-reporting of welfare receipt on the CPS. Worsened reporting of cash welfare on the CPS makes it difficult to gauge how much of the drop in welfare receipt among female-headed families with children represents eligible families who do not receive assistance rather than families who do not report actual welfare aid on the CPS. See Appendix A for a brief analysis of the possible extent of under-reporting of cash welfare on the CPS. Poor Single Mothers’ Work and Welfare Status Although poverty rates among single mothers have declined in recent years, there is a greater likelihood today than in years past that a poor single mother will be working, rather than receiving welfare. As shown above, poor single mothers are less likely to be receiving cash welfare in recent than in earlier years (Figures 4 and 5). Similarly, like all single mothers, poor single mothers are also now more likely to be working than not. Changes in poor mothers’ participation in work and welfare status first became evident in the early-to-mid 1990s, with rates of employment increasing after 1992 and rates of welfare receipt declining after 1993 (see Figure 7, 2 darkest lines). A crossover point was reached by 1996, when the chances that a poor single mother would be working exceeded the chances that she would be receiving welfare. Figure 7 shows that the share of poor single mothers who received cash welfare at any time during the year fell from just over 60% in the 1987-93 period, to about 19% in 2006. The rate of decline in welfare receipt among poor single mothers has been greatest since 1996, a period coinciding with the passage and implementation of national welfare reform legislation. Similarly, the share of poor single mothers who were working at any time during the year increased from around 44% in 1992, to a peak of 64% in 1999, but dropped since, to about 54% in 2006. The share of poor single mothers who relied on cash welfare without working dropped from a peak of 43% in 1991, to about 11% in 2006 (a 75% drop from the 1991 rate). The share of poor single mothers who worked without relying on cash welfare has increased from a recent low of nearly 25% in 1993, to about 47% in 2006. The share of poor single mothers who combined work and welfare over the year, which had remained relatively constant over most of the period at around 20%, fell to about 8% in 2006. 16 In FY2000, 17.194 million people were receiving food stamps, based on monthly average participation rates. In FY2006, monthly average food stamp participation had reached 26.672 million participants. These statistics reflect all households who received food stamps, not just female-headed families. See [http://www.fns.usda.gov/pd/fssummar.htm]. CRS-13 The share of poor single mothers who reported that they neither worked nor received cash welfare during the year (the dotted line in Figure 7) has increased from a low of about 12% in 1991 to about 35% in 2006. This surprising combination may reflect a mix of circumstances, including income or support from other sources such as family members, support from unrelated household members (which is not included in the official poverty measure), and other means of support from outside the household not captured on the CPS. It may also reflect income reporting problems on the CPS, especially with regard to welfare income.17 Finally, welfare diversion and sanction policies may have contributed to the increased number of poor mothers neither working nor receiving welfare. Figure 7. Poor Single Mothers: Work and Welfare Status During the Year, 1987 to 2006 100% Percent 90% 80% 70% 60% Worked during year 50% Worked during year, did not receive cash welfare 40% ) ) ) 30% )Neither worked, nor received ) ) cash welfare during the year ) 20% 10% ) ) ) ) ) ) ) ) ) ) ) ) ) Received cash welfare during year Received cash welfare during year, did not work Worked and received cash welfare during year 0% 87 88 89 90 91 92 93 94 95 96 97 98 99 0r 01 02 03 04 05 06 19 19 19 19 19 19 19 19 19 19 19 19 19 200 20 20 20 20 20 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. 17 See Appendix A on CPS under-reporting. CRS-14 Effects of Earnings, Transfers, and Taxes on Single Mothers’ Poverty Status As shown earlier, in Figure 2, single mothers’ poverty status has improved since 1993. Changes in the economy and changes in welfare policy and other programs, such as the EITC, have both direct and indirect effects on income and poverty. However, the official U.S. poverty measure counts only family cash income (excluding capital gains and lump sum or one-time payments) against a family’s poverty threshold (which varies by family size and composition) to determine whether a family is counted as poor. The definition does not include the value of inkind benefits, such as food stamps, school lunches, or public housing subsidies, nor does it include the effects of taxes or tax credits such as the EITC. Inclusion of inkind benefits and the EITC provides a more comprehensive income definition than the official definition. Additionally, other unrelated household members may contribute to the family’s economic well-being, but determining the extent to which resources are shared among unrelated household members is often difficult. Figure 8 shows the effects of income from these other sources on poverty among all single mothers. Components of family income are sequentially added and measured against families’ poverty thresholds, as one moves from the top line of the chart to subsequent lines below: ! ! ! Line 1: The top line shows the percent of single mothers who would be counted as poor if only family earnings were counted against the poverty line. Line 2: The second line down includes other sources of cash income, in addition to earnings, that were already counted above (e.g., social security payments, unemployment compensation, workers compensation, interest and dividends, inter-family transfers). However, this line does not include cash welfare. Line 3: The third line down adds cash welfare to the other sources already mentioned, and with those sources, represents the income definition used in the official poverty measure. Lines 4 through 6 include food stamps, taxes (including the effects of the EITC and the partially refundable Child Tax Credit) and income of other unrelated household members that are not included under the “official” U.S. Bureau of the Census poverty definition: ! ! ! Line 4: The fourth line down shows the market value of food stamps when added to cash income and compared to the family poverty threshold. Line 5: The fifth line down shows the effect of adding the value of the EITC plus the partially refundable Child Tax Credit and state refundable credits, less federal and state income taxes and payroll taxes, to line 4. Line 6: The bottom (dashed) line shows the effects of counting all income in the household in which the single mother lives, not just that of her related family members, and comparing it to an unofficial CRS-15 “household low-income threshold.” The household low-income threshold used here applies family poverty income thresholds, which are based on family size and composition, to households, based on household size and composition. It must be noted that official poverty measurement is based on a family concept, which assumes that family members share income and economies of scale that result from shared living arrangements. It is generally agreed among researchers that assumptions regarding income sharing and shared economies of scale among related family members, who have ties based on blood, marriage, and adoption, do not apply to the same extent among unrelated household members. Consequently, these estimates of household low-income status likely overstate the effect of household income on reducing poverty among families headed by single mothers. Figure 8. Effects of Earnings, Transfers and Taxes on Family Poverty and Household Low-Income Status of Single Mothers, 1987 to 2006 Percent poor 60% 55% 50% Poor based on: 45% 40% 35% Earned income only + + + + + + + + cash income other than cash welfare + cash welfare (Official Poverty Definition) + 30% + food stamps + + + 25% + EITC + Child Tax Credit less FICA and income taxes + + + + + Income Below Low-Income Threshold: + + + + Household Household cash + food stamps + EITC+ Child Tax Credit less FICA and income taxes 20% 15% 10% 5% 0% r 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-16 In viewing Figure 8, note that the trend in earnings is the principal factor affecting the declining trend in poverty, whereas the other income sources, with the exception of the EITC, affect the level of poverty, more than its trend, over time. Evidence of this effect is that most lines in the chart, with the exception of the EITC, roughly run parallel to the ones above. Effect of Earnings and Other Nonwelfare Cash Income on Poverty Figure 8 shows that between 1993 and 2000, single mothers’ poverty, based on family earnings alone, fell from 56.2% to 40.8% (line 1). As a result of the economic recession, their “earned-income poverty rate” rose from 2001 through 2004, and in 2006, at 44.5%, was still above its historic low in 2000. Adding other cash income, except cash welfare, to family earnings (line 2), reduces poverty in 1993 from 56.2% (line 1) to 47.4% (line 2), and in 2006 from 44.5% to 35.7%. Effect of Cash Welfare on Poverty Cash welfare benefits have only a small impact on the poverty rate, as these benefits generally are not sufficient, even when combined with other cash income, to lift families above the federal poverty threshold. In the vast majority of states the level of earnings or other cash income at which states’ cash welfare benefits under TANF become unavailable for a family are well below the poverty line. For example, in January 2003, in only seven states could a single mother with two children have earnings above the poverty line and still continue to receive TANF cash assistance.18 Consequently, cash welfare benefits have little impact on the poverty rate. The addition of cash welfare (line 3, representing the official income definition for measuring poverty) reduces poverty only slightly: from 47.4% (line 2) to 45.2% (line 3) in 1993, and from 35.7% to 35.1% in 2006. Nonetheless, cash welfare benefits can have a significant impact on the level of poor families’ incomes, affecting the degree to which their incomes fall below the poverty income standard. This impact is not captured by changes in the poverty rate as shown above in Figure 8. Effect on Poverty of Counting Selected Income Sources Not Included in the “Official” Poverty Measure The following three measures include income from sources not included under the “official” U.S. Bureau of the Census poverty definition: food stamps, taxes (including the effects of the EITC and the partially refundable Child Tax Credit) and income of other unrelated household members. Effect of Food Stamps on Poverty. The fourth line from the top in Figure 8 shows the effect on the poverty rate of single mothers by counting the value of food stamps. The line shows that food stamps reduce the poverty rate of single mothers 18 See U.S. Congress, House Committee on Ways and Means, 2004 Green Book, Table 7-16 (TANF Phaseout Points), pp. 7-51 to 7-53. Washington, DC, March 2004. CRS-17 from about 2 to 3 percentage points over the period (compare the reduction in poverty from line 3 to line 4). Effect of Taxes and Tax Credits on Poverty. As noted above, the net effect of the EITC19 and the Child Tax Credit20 (after counting the effect of reductions in income from federal and state income taxes and FICA taxes) (line 5), when added to total family cash income and food stamps (line 4), causes a divergence in trend from the lines above. This is especially notable after 1993. A major expansion of the EITC, passed by Congress in 1993 and phased in between 1994 and 1996, increased the amount of the EITC work bonus families might receive. The antipoverty effectiveness of the EITC was approximately three times greater in 2006 than in 1993. In 1993, the after-tax poverty rate (counting food stamps) among single mothers dropped from 42.7% (line 4) to 40.7% (line 5), a 2.0 percentage point (4.7%) reduction. In 2006, the EITC in combination with the Child Tax Credit (after counting estimated tax payments) reduced poverty from 32.9% to 27.9%, a 5.0 percentage point (15.2%) reduction. The bulk of this reduction is the result of the EITC, as the Child Tax Credit is comparatively small for most families headed by single mothers with adjusted gross incomes near the poverty line. As receipt of the EITC is conditioned on earnings, the growing impact of the EITC in part reflects the rise in work rates among single mothers. Among those who are working and poor (before counting the EITC), the EITC helps lift the income of some above the poverty line. Although the EITC expansion provided additional income to low-income families who were already working, it may also have helped induce increased employment among family heads with low to moderate earnings potential, and thus contributed to the decline in poverty based on earned income only that has occurred since 1993 (shown as the top line in the chart). Note too, that to the extent that changes in cash welfare programs in recent years have encouraged work (such as work requirements and increased earnings disregards), these changes may have had an indirect effect on poverty by increasing earnings and, through earnings, making the EITC available to a greater number of families. Effect of Unrelated Household Member’s Income on Poverty. The household low-income line (bottom line) shows that if all household members’ income is counted, as though shared equally among household members, the poverty rate among single mothers would drop by at most 3 to 4 percentage points over the 1987 to 2006 period. Using the household, as opposed to the family, as the economic unit for determining poverty reduces the post in-kind transfer, post-tax, poverty rate in 1993 from 40.7% (line 5) to 36.8% (line 6) and, in 2006, from 27.9% to 23.7%. Again, this is most likely an overstatement of the possible effect that shared 19 Note that the value of the EITC on the CPS is based on Census Bureau imputations, rather than actual reported tax credits. Also, the EITC is different from most sources of income, as most families receive the EITC as a lump sum refund. 20 For a discussion of the Child Tax Credit, see CRS Report RS21860, The Child Tax Credit, by Gregg A. Esenwein. CRS-18 household living arrangements might have on single mothers’ poverty status because of uncertainty about the extent to which such income is actually shared. Degree of Poverty Among Poor Single Mothers As noted above, the poverty rate measures only the percent of families whose incomes fall below their respective poverty thresholds, based on family size and composition. Although the poverty rate provides an overall indication of the level of need in the population, it does not measure the extent of need among poor families. Figures 9 and 10 show two different measures of the “poverty gap” among poor families headed by single mothers — that is, the degree to which poor families’ incomes fall below the poverty income level. In these figures the poverty gap is depicted as family income as a percent of poverty among poor families. Figure 9 is based on the cash income poverty measure, whereas Figure 10 is based on cash income plus the value of food assistance and taxes (including the EITC and the Child Tax Credit). Note that the families depicted in Figure 10 are a subset of those included in Figure 9, as they are families who remain poor after considering food stamps and taxes (including the EITC and the Child Tax Credit) — the effects of which are not counted in Figure 9. In each figure the extent of poverty among poor families is depicted at various percentiles, based on families ranked by family income as a percent of poverty. Figures 9 and 10 show that the median family income as a percent of need (i.e., poverty) among poor families has remained relatively steady over the past 18 years. Based on “official” cash income, for purposes of measuring poverty, the median family income as a percent of need among poor families headed by single mothers has ranged from a low of 48% to a high of 53% over the period (Figure 9). Looking at just the subset of single-mother families who were poor based on a more comprehensive income definition that includes food stamps and taxes (including the EITC and Child Tax Credit), the median family income as a percent of need was somewhat higher over the period, ranging from a high of 66% of poverty in 1991, to a low of 56% of poverty in 2004. (Figure 10). Both Figures 9 and 10 show recent declines in income relative to poverty for the poorest families headed by single mothers. For example, Figure 9, shows that for the bottom fifth of poor single mothers, family income relative to poverty fell from a recent high of 28% of poverty in 1996, to a low of 15% of poverty in 2005. Looking at the subset of single-mother families that were poor based on the more comprehensive income definition (cash, food stamps, and taxes (including the EITC and Child Tax Credit)), the bottom fifth have seen a decline in relative economic well-being from a high of 43% of poverty in 1994, to a low of 22% of poverty in 2006 (Figure 10). CRS-19 Figure 9. Poverty Gap* Percentiles Based on Cash Income Among Poor Single-Mother Families, 1987 to 2006 Income as a percent of poverty 100% 90% Top 20 percent 80% 70% 60% Top 40 percent 50% Median (50th Percentile) 40% Bottom 40 percent 30% 20% Bottom 20 percent 10% 0% r 89 990 991 992 993 994 995 996 997 998 999 00 001 002 003 004 005 006 88 87 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 19 19 19 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Poor families’ cash income as a percent of families’ poverty thresholds. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-20 Figure 10. Poverty Gap* Percentiles Based on Net After-Tax Cash Income (Including the EITC) and the Value of Food Stamps, Among Poor Single-Mother Families, 1987 to 2006 Income as a percent of poverty 100% 90% Top 20 percent 80% 70% Top 40 percent 60% Median (50th Percentile) 50% Bottom 40 percent 40% 30% Bottom 20 percent 20% 10% 0% 87 988 989 990 991 992 993 994 995 996 997 998 999 00 19 1 1 1 1 1 1 1 1 1 1 1 1 20 r 01 002 003 004 005 006 20 2 2 2 2 2 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Poor families’ based on cash after-tax income and the market value of food stamps as a percent of families’ poverty thresholds. r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. Sources and Level of Income Among Lower-Income Single Mothers The composition and level of income among the single-mother families at the bottom of the income distribution has changed markedly in recent years, reflecting increased earnings supplemented by increased EITC and reductions in cash welfare and food stamps. Single mothers with the lowest incomes, depicted as the bottom fifth (bottom quintile) of single mothers ranked by their families’ incomes, by 1999 had more than doubled their earnings since 1994. However, these earnings gains, even when supplemented by the EITC, have not been sufficient to offset losses in cash welfare and food stamps that have occurred since 1994 — the year in which their income was highest. Earnings of single mothers in the bottom income quintile peaked in 2000 but fell each year through 2005. In 2006, average earnings of single CRS-21 mothers in the bottom income quintile increased somewhat over 2005. In spite of their greater earnings, average total income of single mothers in the bottom income quintile in 2006 was still well below their 1994 income level, which marked a peak over the 20 years depicted. Single mothers ranked in the bottom 20% to 40% by income (second quintile) also experienced significant earnings gains since 1994. For these families, earnings gains supplemented by the EITC have more than offset reductions in cash welfare and food stamps over the period, resulting in higher overall income in most recent years than in 1994. After reaching a peak in 2000, average total income among mothers in the second quintile has fallen somewhat due to reduced earnings and EITC, presumably as a result of 2001 economic recession. Figures 11 and 12 examine sources of income among the bottom quintile (bottom 20%) and the second lowest quintile (bottom 20% to 40%) of single-mother families, respectively, based on their pre-tax cash income relative to poverty. The income to poverty ratios demarcating the break points at which a family qualifies as being in the bottom and second from the bottom quintiles are shown in Appendix B. The charts show the average annual income, in 2006 dollars, from the following sources: cash public assistance (AFDC, TANF, and General Assistance (GA)); Supplemental Security Income (SSI); food stamps (market value); child support and alimony; other cash income other than earnings; net earnings (earnings net of the employee share of FICA payroll taxes and any federal or state income taxes); the EITC; the Child Tax Credit, and state refundable tax credits. The employee share of FICA payroll taxes, and any federal or state income tax payments are also shown as negative values. Note that these estimates are based on year-to-year income comparisons of cross-sectional survey data, rather than a comparison of incomes for the same families over time. Figure 11 shows declining reliance on cash welfare and food stamps since 1994, and increased reliance on earnings, supplemented by the EITC, among families headed by single mothers in the bottom income quintile. However, earnings gains, even when supplemented by the EITC, have not been sufficient to offset the losses in income from cash welfare and food stamps since 1994. Average earnings for these families peaked in 2000, but total family income ($8,405) still fell short of that attained in 1994 ($8,654). Since 2000, average earnings fell each year through 2005. Increased food stamp benefits since 2000 have helped to bolster families’ income somewhat, but cash welfare benefits have continued to erode. In 2006, average total income ($7,587) of single mother families in the bottom income quintile was only slightly above the 20-year low ($7,322) observed in 2004, and well below the 20-year peak ($8,654) observed in 1994. Average cash welfare and food stamp benefits reported by single mothers in the bottom quintile have fallen since 1994. In 1994, combined average AFDC and General Assistance benefits were $3,075 for this population; by 2006 combined TANF and General Assistance had fallen to $854, 25% of their 1994 value. Similarly, in 1994, average food stamp benefits amounted to $2,996; by 2006 they amounted to $2,113 — 71% of their 1994 value. In spite of earnings and supplemented EITC benefits being higher in 2006 than two decades earlier, reductions in cash welfare and food stamp benefits have resulted in lower average CRS-22 total income for single mothers at the bottom of the income distribution (i.e., bottom income quintile). The growing importance of the EITC as an earnings supplement can be illustrated by comparing the average EITC as a share of average earnings shown in Figure 11. Legislative expansions to the EITC in 1990 (phased in between 1991 and 1992) and in 1993 (phased in from 1994 through 1996) expanded the credit’s “work bonus” to families with children, amounting to a supplement of as much as 40 cents on each dollar earned. In 1990, the average EITC depicted in Figure 11 amounted to about 13% of average earnings of mothers in the bottom income quintile. By 1993, the EITC “work bonus” increased to 18% of earnings, and then doubled to 37% of earnings by 1996, once legislative expansions had completely phased in. In addition to providing needed income to low-income working families, the EITC has also likely encouraged work and increased earnings. Figure 12 is similar to Figure 11, but shows average income by source for the second quintile of single-mother families, ranked by their income relative to poverty. The chart shows comparatively large gains in average total income from 1993 to 1995, due largely to increased earnings and EITC. During this short period, average total net income increased from $14,095 to $17,851 — a gain of nearly 27%. Earnings of single-mother families in the second income quintile peaked in 2000 at $12,095 (in 2006 dollars) — more than three times what they earned in 1993. However, from 2000 to 2005 average earnings, and consequently average EITC, declined among these families. Food stamps have helped to offset recent earnings losses somewhat, growing by 66% from 2000 to 2005, whereas cash welfare support continued to diminish over the same period. In 2006, earnings and the EITC increased somewhat compared to 2005, but income from all other sources fell and taxes increased, resulting in lower net average income in 2005 than in 2006. Average total income among single mother families in the second quintile reached its highest level over the 20-year period examined in 2000. In 2000, the peak-income year, earnings in combination with the EITC more than offset the loss in combined cash assistance and food stamps that occurred over the 1995 to 2000 period. Over the period, the gain in average net earnings, in combination with EITC ($6,099), more than offset the $3,519 loss in combined cash assistance and food stamps. By 2000, average net earnings ($12,095) accounted for 60% of these families’ incomes ($20,250) and cash assistance ($739) accounted for just under 4%. In contrast, in 1987, earnings accounted for about 28% of this group’s income ($4,160 in earnings out of a total net income of $14,857), and cash assistance ($5,142) comprised about 35%. In 2000, average total income for families in the second quintile ($20,250) was 36% above that in 1987 ($14,857). CRS-23 Figure 11. Bottom Income Quintile* of Single-Mother Families: Average Annual Income by Source, 1987 to 2006 (in 2006 dollars) Net Income $9,000 $8,654 $8,601 $332 $8,026 $8,000 $7,000 $6,000 $5,000 $499 $8,552 $8,273 $8,311 $7,938 $7,923 $7,699 $7,804 $122 $7,736 $7,587 $898 $7,568 $1,195 $949 $1,031 $7,390 $136 $135 $567 $7,353 $130 $7,414 $7,392 $143 $775 $7,322 $932 $975 $1,503 $140 $139 $722 $595 $975 $1,041 $852 $1,727 $804 $547 $678 $464 $836 $491 $1,161 $1,494 $345 $303 $385 $540 $543 $550 $191 $274 $448 $2,488 $1,994 $224 $2,550 $2,760 $264 $349 $503 $432 $262 $240 $1,976 $2,073 $2,598 $1,867 $1,825 $253 $389 $735 ** $2,722 $2,740 $2,364 $2,678 $4,000 $266 $736 $775 $3,000 $99 $120 $179 $185 Earnings (net of taxes) $1,078 $856 $810 $891 $894 Other income $552 $581 $541 $503 Child support/alimony $414 $110 EITC $695 $2,393 $109 ** $709 $2,589 $2,539 $128 ** Total (Net) Income $315 $2,996 $2,625 $2,873 $2,567 $289 $570 $543 $648 $2,115 $338 $1,826 $285 $1,683 $247 $2,000 $1,914 $1,749 $1,817 $2,098 $2,075 $2,113 Food Stamps $334 $3,315 $1,000 $8,405 $640 $7,950 $2,942 $3,095 $3,283 $3,229 $2,809 $2,954 $3,075 $364 $2,779 $2,467 $477 $478 $2,201 $1,744 $1,432 $1,109 $928 $491 $438 $452 $483 $492 SSI $890 $1,083 $820 $832 $754 AFDC, TANF, GA Taxes $0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000r 2001 2002 2003 2004 2005 2006 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Econo Supplement (ASEC) data. * Quintiles based on ranking of ratios of family cash, pre-tax income, relative to poverty. Taxes include federal and state income taxes and FICA taxes. ** Federal child credit (partially refundable portion) amounting to $123 in 2004, and $3 in 2005 and 2006, plus State refundable income tax credits amounting to $24 in 2004, $25 2005 and $33 in 2006. r Revised estimates based on expanded CPS sample and 2000 decennial census derived weights. CRS-24 Figure 12. Second Income Quintile* of Single-Mother Families: Average Annual Inocme by Source, 1987 to 2006 (in 2006 dollars) Net Income $21,000 $20,250 $19,720 $19,368 $19,354 $19,708 $19,017 $18,973 $18,772 $438 $277 $2,742 $280 $18,089 $2,653 $2,723 $17,851 $2,209 $2,549 $2,298 $2,744 $17,005 $2,588 $1,811$16,485 $2,572 $20,000 ** ** $19,000 $18,000 $17,000 $16,000 $15,000 $14,000 $15,434 $15,184 $15,052 $14,857 $583 $570 $14,462 $14,320 $14,095 $1,322 $458 $678 $13,973 $475 $673 $663 $13,000 $12,000 $4,160 $1,920 ** Total (Net) Income Child Tax Credit EITC $2,299 $6,926 $4,114 $5,298 $4,975 $4,392 $11,000 $4,259 $3,976 $5,224 $6,535 $12,095$11,245$11,358 $10,342$10,045 $10,639 $7,418 $9,065$10,612 $10,246 Earnings (net of taxes) $10,000 $9,000 $1,997 $8,000 $492 $7,000 $1,827 $2,021 $6,000 $5,000 $588 $433 $2,019 $1,746 $1,769 $1,699 $560 $560 $471 $625 $1,748 $2,123 $2,223 $2,136 $534 $677 $555 $568 $4,000 $3,000 $2,000 $1,000 $1,704 $547 $1,785 $1,765 $2,188 $550 $702 $2,018 $734 $2,133 $2,004 $1,992 $751 $2,050 $833 $2,043 $904 $1,727 $973 $1,518 $1,124 $1,270 $961 $5,142 $4,918 $4,571 $4,500 $4,431 $4,029 $4,155 $1,838 $659 $3,445 $3,017 $1,025 $2,574 $1,955 $0 $848 $921 $918 $914 $1,455 $1,096 $2,111 $2,264 $2,448 $1,011 $1,093 $1,038 $809 $857 $743 $899 $739 $709 $865 $696 $580 $2,182 $2,454 $2,388 $2,382 $954 $1,099 $1,081 $1,054 $1,254 $890 $1,343 $1,228 $692 $868 $967 $809 $619 $717 $780 $477 -$1,000 Other income Child support/alimony Food Stamps SSI AFDC, TANF, GA Taxes 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000r 2001 2002 2003 2004 2005 2006 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Quintiles based on ranking of ratios of family cash, pre-tax income, relative to poverty. Taxes include federal and state income taxes and FICA taxes. ** State refundable income tax credits, amounting to an estimated $103 in 2004, and $114 in 2005 and $144 in 2006. r Revised estimates based on expanded CPS sample and 2000 decennial census derived weights. CRS-25 Conclusions and Policy Implications CRS analysis of 20 years of U.S. Census Bureau CPS data shows a dramatic transformation in single mothers’ welfare, work, and poverty status over the period. CPS data generally follow the upsurge in the AFDC caseload evidenced by administrative/program statistics that occurred in the late-1980s and early 1990s, and the historic declines that followed. Increases in the number of families headed by single mothers during the late-1980s and early 1990s are likely to have contributed to the rapid growth in cash welfare caseloads under the AFDC program that occurred over the period. The number of single mothers increased from about 8.2 million in 1987 to 9.9 million in 1993. Cash welfare caseloads peaked in March 1994, and have dropped dramatically since, whereas the number of single mothers stayed close to 10 million in most years since 1994. In 2006, the number of single mothers reached 10.9 million, but the number reporting receipt of cash welfare has continued to fall. Economic conditions certainly contributed to the welfare caseload increase that began in the late 1980s and the historic declines since 1994. A number of policy interventions have helped to increase the economic returns to work and to encourage work over welfare. Increases to the EITC and the minimum wage, and erosion of most states’ welfare benefit levels due to inflation, have helped to increase the economic returns to work compared to welfare in recent years. States’ extension of work requirements to mothers with younger children, increased welfare sanction authority, and adoption of time-limits on welfare receipt, first experimented with under AFDC waiver authority and now widely adopted by states under TANF, have helped to transform the welfare system from an entitlement program to a program that emphasizes self-support, primarily through work, and personal responsibility. The CPS data show that single mothers are considerably more likely to be working, and less likely to be poor or receiving welfare in most recent than in earlier years (Figure 2). Although many of these changes precede passage of the 1996 welfare law, reductions in welfare receipt have since been especially large. Since 1996, poor single mothers are more likely to work during the year than to receive welfare (Figure 7). However, reductions in poverty among single mothers have not been as large as the concurrent declines in cash welfare receipt and increased work among single mothers in recent years. Moreover, CPS data indicate that welfare receipt rates among very poor families based on their pre-transfer income (i.e., income other than welfare) have dropped considerably in recent years (Figure 5). Among single-mother families whose incomes are lowest (the bottom 20% of single-mothers based on family income relative to poverty), income from earnings has grown markedly since 1993 but has failed to offset losses in cash welfare and food stamp benefits which have occurred since (Figure 10). While single mothers are less dependent on welfare in most recent than in past years, increased work has not resulted in marked gains in net income for the bottom fifth of single mothers, ranked by family income relative to poverty. In 2006, average income of these families was well below its 2000 level (its most recent high-water mark), and only slightly above its 2004 level, which marked the lowest level observed in the 20 years examined. The CPS data show that although welfare receipt and poverty among single mothers has declined in recent years, mothers receiving welfare are now more likely CRS-26 to be working, and poor mothers are now less likely to be receiving welfare and more likely to be working than in past years. Prospects of single mothers working their way off welfare and out of poverty hinge in large part on their finding full-time, stable employment at a sufficient wage. CPS data show that most single mothers work full-time schedules (35 or more hours per week) when they work (See Figure 13). In 2006, among single mothers who combined welfare and work during the year, 59% worked full-time schedules — not that much different from working poor single mothers who did not receive welfare, of whom 61% worked full-time schedules. However, mothers who worked and received cash welfare were considerably less likely to have worked full-year (50 to 52 weeks) (30%) than their working poor counterparts who did not receive cash welfare (52%). Figure 13. Working Single Mothers’ Job Attachment, by Welfare and Poverty Status: 2006 Percent 100% 8.2% 90% 21.8% Part-time, part-year 4.9% Part-time, part-year 6.5% Part-time, full-year 10.6% Full-time, part-year 78.0% Full-time, full-year 10.0% 31.4% 80% 13.7% 70% 17.7% Part-time, full-year 9.3% 60% 50% 40% 25.9% Full-time, part-year 39.1% 68.2% 30% 20% 10% 34.6% Full-time, full-year 20.2% 0% Worked and received cash welfare during the year Poor, received no cash welfare Near poor (100% - 150% of poverty), no cash welfare Income above 150% of poverty, no cash welfare Welfare and poverty status Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. NOTE: Details may not sum to 100% due to rounding. One policy challenge to reduce poverty and welfare dependency among single mothers may be to assist mothers in moving to full-time, full-year work. However, full-time full-year work is likely necessary, but not sufficient, for some single mothers to have incomes above poverty and not rely on cash welfare. About one in five (21.3%) single mothers who combined work and welfare worked full-time, fullyear, and one in three (32.8%) poor single mothers who did not receive welfare CRS-27 worked full-time full-year. (See Figure 13). For these mothers, full-time attachment to a job was insufficient to move them off of welfare or out of poverty. Single mothers with incomes somewhat above poverty (100% to 150% of poverty) were much more likely to have worked full-time full-year (59.1%) than working poor mothers not receiving welfare (32.8%) and nearly 3 times as likely as mothers who combined work and welfare during the year (21.3%). In March 2007, most working single mothers who were poor or received cash welfare earned more than the federal statutory minimum wage of $5.15 per hour applied at that time.21 Figure 14 shows that in March 2007, the median hourly wage of single mothers who were either poor or received welfare during the prior year was estimated at $8.50 per hour;22 half of such mothers earned more, and half earned less. The middle 50% of such mothers earned between $7.00 and $11.00 per hour (denoted by the inter-quartile range). Working mothers who were near poverty (between 100% and 149% of poverty) and did not receive cash welfare in the prior year earned 95 cents per hour more than their poor or welfare-reliant counterparts, at the median hourly wage ($9.45 per hour); 50 percent of these near poor working mothers earned between $8.00 and $11.71 per hour. Combined with their somewhat higher wages, near-poor single mothers are more likely to work full-time full-year than their counterparts who receive cash welfare or are poor. Clearly full-time full-year work lessens the chances that a single mother and her children will be poor or receive cash welfare, but does not completely eliminate those chances. Among single mothers who did not work full-time fullyear, 61% were poor or received cash welfare in 2006, compared to only 13% who worked full-time full-year (not shown in figures). Single mothers have lost economic ground since the 2001 recession. Their situation is likely to worsen if the economy falters. The bottom fifth of single mothers, ranked by income relative to poverty, appear economically worse off than before passage of the 1996 welfare reform law, on the basis of their measured income. In 2004, their total income was at the lowest level measured over the 20 years examined. Single mothers ranked in the bottom 20% to 40% based on income relative to poverty have also failed to recoup income losses since the 2001 recession, but their measured incomes are still well above pre welfare reform levels. Among 21 P.L. 110-28, enacted on May 25, 2007, raised the federal minimum wage to $5.85, effective July 2007, and in subsequent years to $6.65, effective July 2008, and $7.25, effective July 2009. 22 The CPS asks questions about hourly wage rates of hourly workers for only about one fourth of the CPS sample who are leaving the survey — a group technically referred to as the “outgoing rotation group.” (The CPS interviews households for eight months. After four months of interviews, a household leaves the survey for four months, and afterwards is interviewed for an additional four months, after which the household leaves the survey permanently. In March, selected questions, such as hourly wage rates, are asked only of households who have been in the survey for four or eight months, and will be leaving the survey in the following month (either temporarily or permanently)). The estimates of hourly earnings shown in Figure 14 are based on hourly wages of hourly workers, and for other workers, estimated hourly earnings based on reported gross weekly earnings divided by usual hours worked. CRS-28 families headed by single mothers their incidence of poverty has increased from a historic low of 31.8% in 2000, to 35.1% in 2006. A strong economy may be necessary, but not sufficient, to markedly reducing poverty among families headed by single mothers. Absent significant increases in single mothers’ job attachment or hourly earnings, income supports in the form of child support, earnings supplements, such as the EITC, food, housing, and medical assistance, as well as cash welfare, are likely to continue to play important roles in addressing the needs of single-mother families. A challenge for these and other approaches will be to reduce basic unmet needs and at the same time promote economic self-sufficiency. Current signs of a faltering economy spotlights this challenge. Figure 14. Hourly Wage Rates* of Working Single Mothers in March 2007, by Welfare and Poverty Status in 2006 (Median and Inter-Quartile Range) Hourly wage rate $25.00 $20.00 $20.10 $15.00 $15.00 $11.71 75th percentile $11.00 $10.38 $10.00 $9.45 Median 25th percentile $8.50 $8.00 $7.00 $5.00 $0.00 Poor or received welfare Near poor (100% to 149% of poverty) no welfare received Income 150% of poverty and above, no welfare received Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Hourly wage for hourly wage workers, and estimated hourly wage equivalent, based on reported gross weekly earnings divided by usual hours worked, for CPS outgoing rotation group (approximately 1/4th of the CPS sample). CRS-29 Appendix A: Cash Welfare Under-Reporting on the CPS A comparison of AFDC/TANF administrative statistics and CPS-estimated caseload counts suggests that the CPS undercounts actual cases and that the CPS undercount has worsened in recent years. Figure A-1 shows that from 1987 to 1991, the CPS accounted for roughly 80% of the AFDC administrative caseload count, but in 2006 the CPS captured only about 54%.23 Worsened reporting of cash welfare on the CPS makes it difficult to gauge how much of the drop in welfare receipt among single mothers represents eligible families who do not receive assistance, rather than families who do not report actual welfare aid on the CPS. Figure 15. AFDC/TANF Cases: CPS Estimates Versus Administrative Caseload Counts (Annual Monthly Average), 1987 to 2006 Percent Number (in millions) 100% 5.0 90% 4.5 Administrative count (left axis) 80% 4.0 CPS as a percent of administrative count (right axis) 3.5 70% 60% 3.0 CPS count (left axis) 2.5 50% 2.0 40% 1.5 30% 1.0 20% 0.5 10% 0% 0.0 87 19 19 88 19 89 9 19 0 19 91 9 19 2 93 19 19 94 19 95 19 96 19 97 19 98 19 99 20 r 00 01 20 20 02 20 03 20 04 20 05 0 20 6 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data and Department of Health and Human Services (DHHS) caseload data. r Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. 23 The CPS estimates are for all adults reporting receipt of AFDC or TANF during the year, converted to an estimate of an annual monthly average, based on the number of months over the year recipients reported receiving assistance. For a detailed discussion of cash welfare under-reporting on the CPS and other surveys see Bavier, Richard. Accounting for increases in failure to report AFDC/TANF receipt. Unpublished manuscript. Washington, DC. Office of Management and Budget, 2000. CRS-30 Figure A-1. Support Table 1. AFDC/TANF Cases: CPS versus Administrative Caseload Counts, Annual Monthly Average, 1987 to 2006 (numbers in millions) Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Persons reporting AFDC or TANF receipt on the CPSa 3.039 3.056 2.901 3.226 3.554 3.596 3.844 3.551 3.193 3.022 2.355 1.892 1.464 1.320 1.392 1.216 1.140 1.346 1.160 1.227 0.955 AFDC and TANF cases based on administrative datab 3.719 3.691 3.738 3.995 4.434 4.765 4.949 4.972 4.734 4.380 3.690 3.007 2.515 2.181 2.181 2.075 2.023 2.001 1.958 1.876 1.764 CPS as a percent of administrative total 81.7 82.8 77.6 80.8 80.2 75.5 77.7 71.4 67.8 69.0 63.8 62.9 58.2 60.5 63.8 58.6 56.3 67.3 59.3 65.4 54.1 Source: Congressional Research Service (CRS) estimates based on U.S. Bureau of the Census 1988 to 2006 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data and U.S. Department of Health and Human Services (DHHS) AFDC and TANF caseload data. a. Estimated average monthly number based on number of months CPS respondents indicated they received AFDC or TANF during the year. b. Average monthly number of AFDC cases in the 50 states and the District of Columbia. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-31 Appendix B: Family Income to Poverty Ratios: Cutoffs for Income Quintiles Figure B-1 shows the income relative to poverty cutoffs for defining the first and second income quintiles depicted in Figures 11 and 12. The dark lines represent the level of family cash income (i.e., the income definition for measuring poverty under the official U.S. Bureau of the Census poverty definition) as a percent of poverty which defines the bottom fifth and bottom two-fifths of single-mother families, ranked by family relative to poverty. The lighter-shaded lines show other income percentiles relative to poverty. The figure shows, for example that the bottom fifth of single-mother families ranked by official cash income relative to poverty had family income below 42% of poverty in 1992. By 2002, the relative income of the bottom fifth (20th percentile) of single-mother families increased to 66% of the poverty line, but by 2006 stood at 59% of poverty. Similarly, the secondfifth (between the 20th and 40th percentiles) of single-mother families had family income above 42% of poverty but below 85% of poverty in 1992. By 2002, the second-fifth of single mother families had family incomes above 66% of poverty but below 123% of poverty. In 2006, the second-fifth of single mother families declined, and ranged between 59% and 113% of poverty. The figure shows that the bottom 10% of single-mother families has shown essentially no improvement over the 20year period. Figures B-2 and B-3 are similar to Figure B-1, but depict single-mother families’ income rankings based on alternative definitions of income relative to poverty. Figure B-2, for example, ranks families based on family after-tax income (including the EITC) plus food stamps, whereas Figure B-3 ranks families based on household after-tax income plus food stamps, relative to a household poverty income threshold based on household size and composition. In both cases, Figures B-2 and B-3 show comparatively better income position relative to poverty than does Figure B-1, which uses the official poverty income definition. For example, in 2006, the bottom fifth of single-mother families had incomes below 59% of poverty under the official poverty income definition, shown in Figure B-1. When taxes, including the EITC, and food stamps are considered the bottom fifth of single-mother families had incomes below 78% of poverty (shown in Figure B-2), and if household after-tax income and food stamps are counted against a revised household poverty threshold, the bottom 20% of single-mother families have incomes below 89% of poverty (shown in Figure B-3). Although the alternate income definitions also result in improved income standing relative to the official poverty income definition for the bottom 10% of single-mother families, the trend over the 20-year period shows little improvement. CRS-32 Figure B-1. Income to Poverty Percentiles of Mother-Only Families Based on Ranking of Families by Family Cash Income Relative to Family Poverty Income Thresholds, 1987 to 2006 Income as a percent of poverty 200% 190% 180% 170% 160% 150% 50th percentile 140% 130% 120% 40th percentile 110% Poverty Line 100% 90% 30th percentile 80% 70% 60% 20th percentile 50% 40% 30% 10th percentile 20% 10% 0% r 01 002 003 004 005 006 87 988 989 990 991 992 993 994 995 996 997 998 999 00 2 2 2 2 2 20 1 1 1 1 19 1 1 1 1 1 1 1 1 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-33 Figure B-2. Income to Poverty Percentiles of Mother-Only Families, Based on Ranking of Families by Combined After-Tax and Food Stamp Income Relative to Family Poverty Income Thresholds, 1987 to 2006 Income as a percent of poverty 200% 190% 180% 170% 160% 50th percentile 150% 140% 130% 40th percentile 120% 110% 100% Poverty Line 30th percentile 90% 80% 20th percentile 70% 60% 50% 10th percentile 40% 30% 20% 10% 0% r 87 88 89 90 91 92 93 94 95 96 97 98 99 00 001 002 003 004 005 006 2 2 2 2 2 2 19 19 19 19 19 19 19 19 19 19 19 19 19 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-34 Figure B-3. Income to Poverty Percentiles of Mother-Only Families Based on Ranking of Families by Household Combined After-Tax and Food Stamp Income Relative to Household Poverty Income Thresholds, 1987 to 2006 Income as a percent of poverty 200% 190% 180% 170% 50th percentile 160% 150% 40th percentile 140% 130% 120% 30th percentile 110% Poverty Line 100% 90% 20th percentile 80% 70% 60% 10th percentile 50% 40% 30% 20% 10% 0% r 87 88 89 90 91 92 93 94 95 96 97 98 99 00 001 002 003 004 005 006 2 2 2 2 2 2 19 19 19 19 19 19 19 19 19 19 19 19 19 20 Year Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights CRS-35 Figure B-1 Support Table. Income to Poverty Percentiles of Mother-Only Families Based on Ranking Families by Family Cash Income Relative to Family Poverty Income Thresholds, 1987 to 2006 Income as a percent of poverty defined at each percentile Year 10th 20th Percentile Percentile 30th Percentile 40th Percentile 50th Percentile 1987 29.3 46.7 65.6 87.2 116.5 1988 27.8 44.5 65.0 86.2 121.7 1989 29.6 49.3 69.5 94.2 126.8 1990 29.6 47.3 66.5 88.8 120.7 1991 27.3 44.9 63.4 85.3 114.2 1992 26.5 42.5 62.0 84.7 113.5 1993 28.2 44.4 61.0 84.2 114.6 1994 30.1 48.2 67.9 91.8 122.9 1995 31.9 53.2 74.3 99.8 130.0 1996 31.9 50.6 72.8 100.5 130.0 1997 29.3 51.4 73.9 100.2 130.3 1998 29.5 54.5 82.0 106.9 138.3 1999 32.1 61.0 87.2 119.0 148.0 2000 37.2 70.5 96.7 125.7 155.0 2000r 34.2 65.3 93.7 125.3 156.2 2001 29.1 64.0 92.9 122.9 154.1 2002 32.3 65.5 94.3 122.7 157.4 2003 28.3 60.4 87.7 120.1 154.8 2004 26.4 57.3 85.6 117.1 151.4 2005 27.7 55.6 86.2 115.6 148.6 2006 27.3 58.5 86.2 112.5 145.4 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-36 Figure B-2 Support Table. Income to Poverty Percentiles of Mother-Only Families Based on Ranking of Families by Combined After-Tax and Food Stamp Income Relative to Family Poverty Income Thresholds, 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Income as a percent of poverty defined at each percentile 20th 30th 40th 50th 10th Percentile Percentile Percentile Percentile Percentile 47.2 65.3 80.6 97.5 119.3 43.8 61.8 79.6 97.1 123.7 47.4 66.2 83.5 102.7 127.8 46.7 65.1 81.7 100.2 122.8 46.9 64.5 80.1 97.6 121.3 43.8 61.5 78.4 98.7 121.7 45.7 62.9 78.7 98.2 122.4 50.0 68.2 85.8 108.8 132.6 51.5 72.6 93.3 117.4 139.1 51.8 71.3 92.2 118.1 139.6 45.4 71.4 94.3 117.7 139.7 48.2 75.0 101.1 124.6 148.1 50.1 80.1 105.9 131.2 153.7 55.3 89.4 112.6 135.7 157.8 50.1 83.5 110.5 135.2 158.1 46.7 82.8 110.0 133.9 157.3 50.1 82.3 110.9 134.8 160.1 42.8 76.7 104.9 132.4 160.9 42.8 75.9 105.0 134.3 159.5 44.3 76.6 106.4 134.3 158.0 44.6 77.9 105.6 130.0 157.1 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-37 Figure B-3 Support Table. Income to Poverty Percentiles of Mother-Only Families Based on Families Ranked by Household Combined After-Tax Food Stamp Income Relative to Household Poverty Income Thresholds, 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Income as a percent of poverty defined at each percentile 20th 30th 40th 50th 10th Percentile Percentile Percentile Percentile Percentile 51.1 69.3 85.6 104.5 130.1 49.1 67.5 85.0 105.1 132.2 52.1 71.9 89.1 111.9 138.3 52.8 70.2 87.8 108.7 134.0 52.3 70.1 86.3 108.2 134.7 49.4 67.6 86.3 108.1 132.7 50.9 68.7 84.9 107.6 132.6 54.5 74.0 94.7 119.9 143.6 57.2 79.7 102.4 126.7 149.8 57.2 78.7 102.0 126.3 149.8 54.0 79.4 104.4 128.7 152.3 56.4 83.2 109.8 135.3 160.2 58.6 90.2 117.1 143.0 168.9 65.4 99.5 122.8 148.6 171.4 61.6 95.3 121.1 148.2 173.0 57.3 93.0 120.0 144.2 168.7 59.2 93.3 121.2 146.6 174.3 56.1 88.5 117.3 144.8 173.1 53.6 89.3 118.5 146.4 172.2 55.7 88.1 118.8 145.1 169.8 58.3 89.1 117.3 142.0 168.8 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-38 Appendix C: Support Tables Data Note The March 2002 CPS and subsequent surveys reflect an expanded sample of households compared to prior year surveys and use population control totals from the 2000 decennial census to weight the sample up to U.S. population totals. Prior year surveys included in this report were based on 1990 decennial census-derived weights, or for the March 1987 through March 1990 CPS, 1980 decennial census-derived weights. Shortly after release of the March 2002 CPS, the Census Bureau released a revised March 2001 CPS. The revised data reflect an expanded sample, not included in the original release of the March 2001 CPS, and weights derived from the 2000 decennial census, as opposed to the 1990 decennial census contained in the original release of the March 2001 CPS. The revised March 2001 CPS estimates are deemed to be preferred to those from the original release due to the larger sample size from which they’re derived and the use of more recently derived population-based weights. Data from both the original and revised March 2001 CPS are included in this appendix for comparison, but the analysis and figures in the body of this report are based on the revised data. CRS-39 Figure 1 Support Table. Single Mothers: Poverty and Cash Welfare Receipt, 1987 to 2006 (in thousands) Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Number of mother only families 8,193 8,321 8,400 8,745 9,031 9,567 9,860 9,837 9,887 10,052 9,874 9,881 9,741 9,425 9,712 10,044 10,206 10,411 10,442 10,476 10,938 Number receiving AFDC/TANF 2,719 2,737 2,537 2,901 3,101 3,300 3,439 3,166 2,862 2,669 2,225 1,872 1,543 1,174 1,215 1,064 1,025 1,253 1,054 1,102 991 Poor but not receiving AFDC/TANF 1,399 1,380 1,452 1,456 1,554 1,691 1,722 1,754 1,818 1,946 2,211 2,253 2,216 2,100 2,251 2,501 2,577 2,610 2,890 2,837 3,120 Neither poor nor receiving AFDC/TANF 4,076 4,204 4,411 4,387 4,375 4,575 4,700 4,916 5,207 5,437 5,438 5,756 5,981 6,151 6,246 6,479 6,604 6,448 6,498 6,537 6,827 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-40 Figure 2 Support Table. Welfare, Work and Poverty Status Among Single Mothers, 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Percent who worked during year 67.3 68.9 70.1 69.8 68.7 67.2 68.1 71.4 73.0 75.1 77.3 79.6 82.0 83.4 82.7 81.1 80.3 78.7 77.7 77.6 77.3 Percent poor (“official definition”) 44.7 43.9 41.7 43.7 45.4 45.4 45.2 42.7 40.2 39.8 40.0 37.3 34.0 30.9 31.8 32.4 32.2 33.9 34.9 34.7 35.1 Percent who received AFDC/TANF during the year Did not work Worked Total during year during year 33.2 21.8 11.4 32.9 21.1 11.8 30.2 20.1 10.1 33.2 20.9 12.3 34.3 22.0 12.3 34.5 22.2 12.3 34.9 21.8 13.1 32.2 18.8 13.4 28.9 16.5 12.4 26.6 14.6 12.0 22.5 11.4 11.1 18.9 8.2 10.7 15.8 6.5 9.3 12.5 5.6 6.9 12.5 5.3 7.2 10.6 5.1 5.5 10.0 4.6 5.4 12.0 6.1 5.9 10.1 5.2 4.9 10.5 6.6 3.9 9.1 4.7 4.4 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-41 Figure 3 Support Table. Employment Rates of Single Mothers and Married Mothers by Age of Youngest Child, March 1988 to March 2007 (percent of single mothers employed in March) Single mothers With a Youngest Youngest Youngest child child child child aged under under age aged 3 to 6 to 17 5 3 Year age 18 1988 57.4 35.1 52.9 69.1 1989 58.2 37.9 53.1 70.0 1990 60.3 38.0 61.0 70.9 1991 58.1 36.6 55.7 70.2 1992 57.3 35.2 54.1 69.8 1993 57.3 35.1 54.8 70.1 1994 58.0 37.7 55.2 69.3 1995 61.1 43.1 58.5 70.5 1996 63.5 44.7 60.4 72.9 1997 65.6 51.5 64.3 72.0 1998 68.8 54.8 63.7 76.4 1999 70.7 55.8 69.8 77.1 2000 72.8 59.1 72.7 78.5 2001 73.0 56.1 74.4 79.8 2001r 72.5 57.6 71.3 79.1 2002 71.2 57.9 71.0 76.3 2003 69.6 54.8 69.3 75.4 2004 69.7 54.1 69.5 75.7 2005 68.9 53.7 66.7 75.7 2006 69.6 57.0 68.0 75.1 2007 70.0 56.5 68.6 76.0 Married mothers With a Youngest Youngest child Youngest child child aged child aged under under age 3 to 5 6 to 17 3 age 18 61.8 50.7 58.1 69.6 63.0 51.4 60.8 70.6 63.4 52.7 60.9 70.8 63.1 52.7 60.5 70.5 63.9 53.1 59.4 71.9 63.9 53.2 59.4 71.9 65.5 56.0 61.2 72.6 67.1 57.4 63.9 73.4 67.6 58.2 63.3 74.2 68.5 58.3 64.4 75.2 67.9 58.3 64.1 74.2 67.9 57.0 63.1 75.1 68.4 56.8 66.0 75.0 68.5 57.1 64.7 75.4 68.0 56.0 64.2 75.1 66.7 54.9 61.7 74.1 66.3 53.5 61.7 74.2 65.3 52.4 62.3 72.7 65.9 54.9 61.9 72.8 66.1 55.4 61.8 73.1 67.3 56.9 63.0 74.2 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-42 Figures 4 and 5 Support Table. Single-Mother Family Cash Welfare Recipiency Rates, by Pre-Transfer Income Poverty Status,* 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 All single-mother families Total AFDC/TANF AFDC/TANF Number recipiency Number recipiency (in 000s) rate (%) (in,000s) rate (%) 8,193 33.2 3,820 63.4 8,321 32.9 3,816 63.8 8,400 30.2 3,672 60.5 8,745 33.2 4,029 63.8 9,031 34.3 4,276 63.6 9,567 34.5 4,536 62.7 9,860 34.9 4,679 63.2 9,837 32.2 4,474 60.8 9,887 28.9 4,181 56.5 10,052 26.6 4,168 53.3 9,874 22.5 4,119 46.3 9,881 18.9 3,834 41.2 9,741 15.8 3,443 35.6 9,425 12.5 3,025 30.6 9,712 12.5 3,184 29.3 10,044 10.6 3,348 25.3 10,206 10.0 3,359 23.3 10,411 12.0 3,591 27.3 10,442 10.1 3,725 22.4 10,476 10.5 3,719 23.7 10,938 9.1 3,909 20.2 Single-mother families with pre-transfer income below poverty Pre-transfer income from Pre-transfer income 0$ in pre-transfer Pre-transfer income 25% to below 50% of from 50% to below income below 25% of poverty poverty 100% of poverty AFDC/TANF AFDC/TANF AFDC/TANF AFDC/TANF Number recipiency Number recipiency Number recipiency Number recipiency (in 000s) rate (%) (in 000s) rate (%) (in 000s) rate (%) (in 000s) rate (%) 1,020 88.7 1,003 77.0 609 59.9 1,179 31.8 1,055 89.5 970 73.8 723 53.3 1,064 36.8 1,022 85.7 871 72.8 593 55.6 1,183 32.2 1,142 88.4 909 75.1 677 60.4 1,294 35.9 1,215 87.3 973 79.2 689 63.6 1,391 32.4 1,159 85.2 1,102 73.5 819 56.4 1,450 40.1 1,104 84.7 1,180 78.3 909 60.0 1,477 37.3 961 82.0 1,058 75.2 835 61.0 1,618 38.7 753 80.3 941 73.2 862 59.7 1,625 34.2 776 76.6 838 71.9 994 52.2 1,560 32.4 685 68.4 846 62.6 843 46.2 1,736 30.0 554 61.3 778 55.7 806 45.1 1,682 26.2 378 56.5 711 46.0 736 37.9 1,617 25.2 350 51.8 482 43.8 651 36.5 1,536 19.2 412 45.9 561 42.6 656 33.5 1,553 18.4 491 34.8 623 33.4 640 30.7 1,587 17.1 413 42.6 615 32.3 657 24.7 1,665 14.8 578 44.2 659 39.7 701 29.6 1,641 15.7 581 37.5 634 31.1 754 23.3 1,750 14.0 612 35.3 599 35.5 824 23.0 1,679 15.7 596 30.8 652 28.7 750 23.2 1,907 12.7 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. Note: Details may not sum to totals due to rounding. * Family poverty status based on cash income other than cash welfare. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-43 Figure 6 Support Table. Food Stamp Recipiency Rates Among Single-Mother Families, by Household Income Relative to Household Poverty Threshold, 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Household income below 130% of poverty Household income Household income All single-mother less than 50% of from 50% to below families Total poverty 130% of poverty Food Food Food Food stamp Number stamp Number stamp Number stamp Number recipiency (in recipiency (in recipiency (in recipiency (in 000s) rate 000s) rate 000s) rate 000s) rate 8,193 35.8 4,063 65.7 1,595 76.1 2,469 59.0 8,321 36.3 4,121 65.7 1,706 75.1 2,414 59.0 8,400 33.9 3,917 63.7 1,466 76.9 2,451 55.8 8,745 37.1 4,265 68.4 1,651 79.4 2,614 61.4 9,031 39.1 4,472 68.8 1,736 79.9 2,736 61.7 9,567 41.1 4,756 70.9 1,970 79.8 2,787 64.5 9,860 42.5 4,990 70.8 1,955 80.7 3,034 64.4 9,837 40.2 4,673 70.9 1,786 80.3 2,887 65.1 9,887 37.2 4,494 66.5 1,539 77.3 2,955 60.9 10,052 35.8 4,545 65.0 1,633 76.8 2,912 58.4 9,874 32.4 4,392 61.5 1,642 73.1 2,750 54.6 9,881 29.8 4,193 56.7 1,491 69.5 2,703 49.6 9,741 24.9 3,746 51.5 1,274 63.3 2,472 45.4 9,425 22.3 3,420 49.8 1,013 66.3 2,407 42.9 9,712 22.9 3,526 50.3 1,128 64.6 2,398 43.6 10,044 23.5 3,780 50.1 1,281 60.6 2,499 44.8 10,206 24.6 3,809 51.6 1,268 65.2 2,541 44.8 10,411 25.6 3,969 53.7 1,367 64.1 2,602 48.2 10,442 27.0 4,005 57.0 1,465 68.2 2,540 50.6 10,477 27.8 4,139 56.1 1,507 65.9 2,632 50.4 10,938 26.3 4,303 54.2 1,455 66.9 2,948 48.0 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. Note: Details may not sum to totals due to rounding. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-44 Figure 7 Support Table. Poor Single Mothers: Work and Welfare Status During the Year, 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Number of poor single mothers (in 000s) 3,661 3,650 3,506 3,821 4,101 4,339 4,456 4,203 3,971 4,005 3,946 3,685 3,314 2,911 3,090 3,259 3,284 3,525 3,648 3,640 3,841 Received cash welfare during year (%) 61.8 62.2 58.6 61.9 62.1 61.0 61.4 58.3 54.2 51.4 44.0 38.9 33.1 27.9 27.2 23.2 21.5 26.0 20.8 22.1 18.8 Worked but Received did not Neither cash Worked welfare Combined at any receive cash worked, nor welfare at received but did work and time any time welfare not work welfare during during the during over the the year during the year (%) year (%) year (%) year (%) (%) 43.3 18.5 42.2 23.7 14.5 43.0 19.2 43.5 24.3 13.5 42.7 15.9 43.1 27.2 14.2 41.4 20.5 46.0 25.5 12.6 43.3 18.8 44.3 25.5 12.5 42.1 18.9 43.6 24.7 14.3 41.5 19.8 44.3 24.5 14.1 37.8 20.5 47.3 26.8 14.9 34.2 20.0 49.7 29.7 16.1 31.1 20.3 52.6 32.2 16.4 24.5 19.5 57.8 38.3 17.7 19.2 19.7 60.4 40.7 20.4 15.4 17.8 64.3 46.5 20.3 14.4 13.5 63.8 50.3 21.9 13.6 13.6 61.6 48.1 24.8 12.9 10.4 58.6 48.2 28.6 11.8 9.8 59.0 49.2 29.3 14.7 11.2 56.5 45.3 28.7 12.1 8.7 55.3 46.6 32.6 13.2 8.9 54.0 45.1 32.8 11.0 7.8 54.4 46.7 34.6 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-45 Figure 8 Support Table. Effects of Earnings, Transfers, and Taxes on Family Poverty and Household Low-Income Status on Single Mothers, 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Percent poor based on: Preceding column +: Preceding Preceding column +: Family Family Preceding column +: Family cash welfare column +: EITC plus Child Tax Credit earned Family cash income (“official poverty Family food and state refundable credits income only other than welfare income”) stamps less FICA and income taxes 53.9 46.6 44.7 42.3 41.1 53.8 45.9 43.9 42.2 41.3 52.2 43.7 41.7 39.7 39.2 53.8 46.1 43.7 41.5 39.9 55.2 47.4 45.4 42.8 41.3 55.3 47.4 45.4 42.5 40.6 56.2 47.4 45.2 42.7 40.7 53.9 45.5 42.7 39.8 36.5 51.0 42.3 40.2 36.9 32.5 49.8 41.5 39.8 37.1 32.9 50.6 41.7 40.0 37.7 32.6 47.9 38.8 37.3 35.2 29.7 43.6 35.3 34.0 32.2 27.5 40.1 32.1 30.9 29.3 24.2 40.8 32.8 31.8 30.5 25.8 41.9 33.3 32.4 30.9 26.2 42.2 32.9 32.2 30.5 25.5 42.9 34.5 33.9 32.2 28.3 44.3 35.7 34.9 32.5 28.1 44.0 35.5 34.7 32.6 27.7 44.5 35.7 35.1 32.9 27.9 Household cash income + food stamps + EITC + Child Tax Credit + state refundable credits less FICA and income taxes 38.2 37.9 35.5 36.1 37.0 36.5 36.8 32.1 29.2 29.3 28.3 26.2 23.6 20.3 21.8 22.5 22.3 24.0 23.7 23.7 23.7 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-46 Figure 9 Support Table. Poverty Gap Percentiles* Based on Cash Income Among Poor Single-Mother Families, 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Bottom 20% Bottom 40% 27.2 43.4 26.1 40.7 25.6 42.1 27.4 43.0 25.6 42.5 24.2 39.3 26.2 41.0 27.6 43.8 27.7 45.8 27.7 43.5 22.3 42.9 22.6 42.5 23.4 43.1 23.5 45.5 19.0 42.9 16.4 41.0 18.9 41.6 16.4 39.4 15.6 39.0 15.3 39.2 16.6 41.2 Median (50th percentile) 51.1 48.1 50.9 50.0 50.5 48.0 49.0 50.7 53.3 50.5 51.3 51.5 52.8 54.8 52.6 51.7 53.0 50.6 50.0 48.8 51.4 Top 40% 60.0 57.1 58.9 58.9 58.6 56.6 56.7 58.7 60.3 58.9 60.7 60.3 62.0 66.3 61.5 62.3 63.6 61.4 60.5 57.6 61.2 Top 20% 78.2 74.9 77.1 76.1 75.2 75.1 73.6 76.3 79.7 77.7 78.6 81.2 80.1 82.9 81.2 81.9 81.9 80.1 79.3 79.3 80.0 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Poor families’ cash income as a percent of families’ poverty thresholds. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-47 Figure 10 Support Table. Poverty Gap Percentiles* Based on Cash Income, Food Stamps, and Net Taxes Including the EITC Among Poor Single-Mother Families, 1987 to 2006 Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Bottom 20% 43.1 37.7 40.1 41.1 42.6 38.6 40.5 42.7 40.3 41.2 34.7 30.7 31.3 30.2 26.7 22.4 27.2 24.4 25.7 25.2 22.2 Bottom 40% 59.1 55.9 58.6 58.9 59.3 56.0 56.7 59.0 58.5 58.0 54.3 53.9 53.1 54.0 51.0 48.6 50.8 47.7 47.1 48.8 49.1 Median (50th percentile) 66.1 63.8 65.4 65.1 65.6 61.9 63.4 65.1 65.2 64.0 62.8 61.5 61.6 62.6 61.0 58.9 59.5 57.7 56.2 58.0 60.1 Top 40% 72.7 71.1 72.3 71.3 72.1 68.6 69.6 71.1 71.4 70.8 70.3 68.4 70.0 70.2 69.3 68.3 67.0 67.3 65.7 66.7 68.5 Top 20% 85.4 85.0 85.4 84.8 84.8 83.0 82.6 84.3 85.0 84.3 85.0 84.6 84.8 86.8 85.1 85.4 83.4 84.9 83.5 83.3 84.1 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Poor families’ cash income as a percent of families’ poverty thresholds. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-48 Figure 11 Support Table. Bottom Income Quintile* of Single Mother Families: Average Annual Income by Source, 1987 to 2006 (in 2006 dollars) Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Federal and state income taxes and FICA taxes -96 -103 -86 -91 -75 -72 -72 -102 -124 -149 -127 -177 -223 -302 -241 -226 -229 -146 -157 -144 -205 AFDC, TANF, General Assistance 3,315 2,942 3,095 3,283 3,229 2,809 2,954 3,075 2,779 2,467 2,201 1,744 1,432 1,177 1,109 928 890 1,083 820 832 754 Supplemental Security Income (SSI) 128 99 120 109 110 179 185 289 338 285 247 334 364 570 477 478 491 438 452 483 492 Food stamps (market value) 2,722 2,364 2,567 2,625 2,873 2,740 2,678 2,996 2,589 2,539 2,393 2,115 1,826 1,710 1,683 1,749 1,817 1,914 2,098 2,075 2,113 Child support and alimony 274 253 262 224 191 240 264 303 349 389 315 266 414 618 570 543 648 552 581 541 503 Other income 491 432 550 385 345 448 540 464 543 503 735 709 736 665 775 695 1,078 856 810 891 894 Gross family earnings 1,071 1,264 1,061 1,133 927 908 876 1,297 1,628 1,875 1,621 2,171 2,773 3,645 3,001 2,824 2,717 2,122 2,024 1,968 2,277 EITC 122 139 130 136 135 140 143 332 499 640 567 775 949 1,217 1,031 932 898 595 547 678 722 Refundable child tax credit n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 123 3 3 Refundable state tax credits n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 24 25 33 Total income net of taxes 8,026 7,390 7,699 7,804 7,736 7,392 7,568 8,654 8,601 8,552 7,950 7,938 8,273 9,300 8,405 7,923 8,311 7,414 7,322 7,353 7,587 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Quintiles based on ranking of ratios of family cash pre-tax income relative to poverty. Taxes include federal and state income taxes and FICA taxes. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights. CRS-49 Figure 12 Support Table. Second Income Quintile* of Single Mother Families: Average Annual Income by Source, 1987 to 2006 (in 2006 dollars) Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2000r 2001 2002 2003 2004 2005 2006 Federal and state income taxes and FICA taxes -346 -354 -459 -466 -386 -377 -349 -463 -653 -609 -657 -828 -997 -1,196 -1,166 -1,086 -1,082 -865 -921 -919 -1,083 AFDC, TANF, General Assistance 5,142 4,918 4,571 4,500 4,431 4,029 4,155 3,445 3,017 2,574 1,955 1,455 1,096 794 739 709 580 809 619 717 477 Supplemental Security Income (SSI) 588 534 677 555 568 547 833 973 1,124 961 918 1,025 914 689 743 899 696 692 868 967 780 Food stamps (market value) 2,021 2,019 1,748 2,123 2,223 2,136 2,133 2,004 2,050 1,727 1,518 1,270 921 753 809 857 865 1,054 1,254 1,343 1,228 Child support and alimony 492 433 560 560 471 625 530 702 734 751 904 659 848 1,010 1,011 1,093 1,038 1,099 1,081 954 890 Other income 1,977 1,827 1,746 1,769 1,699 1,704 1,785 1,765 2,188 2,018 1,992 2,043 1,838 2,142 2,111 2,246 2,448 2,182 2,454 2,388 2,382 Gross family earnings 4,160 4,469 5,757 5,442 4,777 4,636 4,325 5,687 7,579 7,143 8,075 9,893 11,609 13,711 13,261 12,331 12,439 11,504 11,263 10,964 11,329 EITC 458 475 583 570 678 673 663 1,322 1,811 1,920 2,299 2,572 2,744 2,809 2,742 2,653 2,723 2,298 2,209 2,549 2,588 Refundable child tax credit n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 438 277 280 Refundable state tax credits n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 103 114 144 Total income net of taxes 14,857 14,320 15,184 15,052 14,462 13,973 14,095 15,434 17,851 16,485 17,005 18,089 18,973 20,713 20,250 19,720 19,708 18,772 19,368 19,354 19,017 Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. * Quintiles based on ranking of ratios of family cash pre-tax income relative to poverty. Taxes include federal and state income taxes and FICA taxes. r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.