Newly Poor Women and the Social Safety Net, 1990–2010

• Published date: 01 January 2024
• DOI: http://doi.org/10.1177/00027162241291684
• Author: Rebecca M. Blank,David Card,Hanns Kuttner
• Date: 01 January 2024
• Subject Matter: Dynamics of Poverty, Work, and Policy

ANNALS, AAPSS, 711, January 2024 121

DOI: 10.1177/00027162241291684

Newly Poor

Women and the

Social Safety

Net, 1990–2010

By

REBECCA M. BLANK,

DAVID CARD,

and

HANNS KUTTNER

1291684ANN THE ANNALS OF THE AMERICAN ACADEMYNEWLY POOR WOMEN AND THE SOCIAL SAFETY NET, 1990–2010

research-article2024

Welfare reforms in the 1990s, particularly the Personal

Responsibility and Work Opportunity Reconciliation

Act of 1996, were motivated by concerns over the long-

term poor. We compare the experiences of newly poor

women in 1990–1992, 2001–2003, and 2008–2010 and

find that the size and sources of the income shocks

generating new spells of poverty remained relatively

stable. In dual-head families, the newly poor were most

often pushed into poverty by a drop in spousal earn-

ings; in single-mother families, the main cause was a

drop in personal earnings. For single mothers in the

latter two periods, we find that income from cash trans-

fers after becoming poor was less than in the 1990–

1992 benchmark. As these transfers include welfare

payments, the timing points to the impacts of the 1996

welfare reforms.

Keywords: poverty; poverty measurement; safety net;

welfare reform; Survey of Income and

Program Participation

The Personal Responsibility and Work

Opportunity Act of 1996 (PRWORA),

known as “welfare reform,” was passed at a

time when both researchers and policymakers

had come to focus on the long-term poor:

Correspondence: hanns.kuttner@wisc.edu

Rebecca M. Blank was chancellor of the University of

Wisconsin–Madison and president-elect of North-

western University. She studied poverty and its meas-

urement, the social safety net, and the labor market.

She served as acting U.S. Secretary of Commerce dur-

ing the Obama Administration.

David Card is the Class of 1950 Professor of Economics

Emeritus at the University of California, Berkeley. He

is a labor economist who works on inequality, educa-

tion, and health topics. He was awarded the American

Economic Association Clark Medal and was corecipient

of the Nobel Memorial Prize in 2021.

Hanns Kuttner is a research associate at the University

of Wisconsin–Madison and was Rebecca Blank’s hus-

band until her death in February 2023.

122 THE ANNALS OF THE AMERICAN ACADEMY

families that had been in poverty (and would remain so) for extended periods.1

This focus reflected changes in social attitudes and the nascent availability of

longitudinal data that showed the importance of very long spells of poverty.

Casual observation and academic research suggested that the long-term poor

were (at best) only weakly connected to the world of work. Less salient to the

designers of PRWORA were the newly poor: families that previously had incomes

above the poverty level and then began a new spell of poverty after a drop in

income. This article compares the experiences of the newly poor before and after

PRWORA, asking whether welfare reform impacted the social safety net for

these families.

The 1990s were deep into the last chapter of the “grand gender convergence”

identified by Goldin (2014). The main welfare program in place at the start of the

decade—the Aid to Families with Dependent Children (AFDC) program—was

a legacy of the New Deal. By providing cash assistance for mothers who stayed

home, it reflected a worldview that was ever more distant from the realities of

modern family life. Most women—even those with preschool children—were

working. In this setting, aid for nonworking parents was seen by many to be dis-

incentivizing work and creating long-term dependence, thus perpetuating long-

term poverty.2

Two major policy changes in the 1990s responded to the evolution of women’s

engagement in the workforce. A series of amendments to the Earned Income Tax

Credit (EITC) in the early 1990s reduced the federal income tax burden for low-

income families and, for many, brought a payment from the government—effec-

tively, a “negative income tax” of the type advocated by Friedman (1962). Then,

in 1996, PRWORA ended the historic AFDC program, an open-ended entitle-

ment, and replaced it with a block grant to states—the Temporary Assistance for

Needy Families (TANF) program. The name reflected the expectation that cash

assistance would no longer be available indefinitely. The block grant feature

meant that states had considerable leeway in the administration of their TANF

programs. Within just a few years, the number of cash welfare recipients had

fallen precipitously (see, e.g., Fang and Keane 2004). States used their newfound

flexibility to channel funds away from cash assistance and into programs like child

care and job training.3 Advocates for ending “welfare as we know it” were seen as

having been proved right.

In the late 2000s, when the Great Recession was underway, benefits from the

Supplemental Nutrition Assistance Program (SNAP) (earlier known as the Food

Stamp program) were expanded, and the maximum duration of unemployment

insurance payments available to qualified job losers was lengthened. Table 1

summarizes how much participants could receive from these different programs

in 1990, 2001, and 2008—the starting years of the three panels we use in the

analysis below.

NOTE: This article expands on ideas developed in a paper by Rebecca Blank and David Card

in 2008 that was nearly complete by the time of Blank’s passing. We are grateful to Becky for

the insights that led to the initial paper and for her notes on an earlier version.