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Family Structure, Poverty, and the Underclass SARA MCLANAHAN, IRWIN GARFINKEL, and DOROTHY WATSON INTRODUCTION AND CONCLUSIONS Family structure and household composition have changed dra- maticaDy during the past two decades. Young adults are more likely to live apart from their parents today than they were 20 years ago, the aged are less likely to live with relatives, and children are more likely to live in households headed by single women (Bureau of the Census, 1984~. Of all these changes, the growth of mother-only fam- ilies is perhaps the most striking and has certainly stimulated the most concern. This concern arises in part because of the economic insecurity of these families nearly half are poor, and most of these poor fannies are dependent on welfare and in part because mother- only families may be linked to the growth of an underclass. Over half of all children born today will spend some time in a mother-only family, which means that this family form is playing a major role in shaping the next generation of Americans (Bumpass, 1984~. This paper begins by describing the increase in the number of families headed by single women over the past several decades. We examine both overall trends and trends in central cities to determine whether the change in family structure is more or less prominent in urban areas than in suburban and nonmetropolitan areas. Following the description of trends, we discuss the causes of the growth in such families, including the effects of increases in income transfer programs 102

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FAMILY STRUCTURE, POVERTY, AND THE UNDERCLASS 103 and of changes in men's and women's employment opportunities. We conclude that for whites the major cause of growth has been the increase in women's employment opportunities; for blacks it has been the decline in mate employment. Increases in welfare benefits accounted for about 10 to 15 percent of the growth in mother-only families between 1960 and 1975. Some analysts have equated the growth of families headed by women with the Feminization of poverty and the emergence of an "underclass. In the second section of the paper, we examine these claims and attempt to clarify the relationships among single motherhood, poverty, and economic dependence. We conclude that the feminization of poverty is not a particularly useful concept for understanding the economic status of mother-only families inasmuch as it implies an increase in poverty during a time when rates actually declined. Moreover, a large proportion of mother-only families are not poor, even though they may have experienced large drops in income as a consequence of marital disruption. This is not to say that poverty is not a serious problem. Mother-only families are more likely to be poor than any other major demographic group, and they stay poor longer than other groups. An empirical analysis of the sources of income for mother-only fannies indicates that a major cause of poverty is the low earnings of single mothers. Despite their status as family head, single mothers earn an average income that is between 30 and 40 percent of the earnings of married fathers. The absence of child support from noncustodial parents and low welfare benefits in most states also contribute to income insecurity and poverty. Have mother-only families contributed to the growth of an un- derciass? This question is addressed in the third section of the paper. Although the term underclass has been used in a variety of ways, we define it as a group that is both persistently detached from the legitimate work force and socially isolated. Persistence must include intergenerational persistence as well as a long-term condition for the individual. We find that only a small minority of white mother-only families fits any of the criteria for an underclass. The picture for blacks is somewhat cloudier. A substantial proportion of black single mothers exhibit persistent nonattachment to the labor force as measured by long-term welfare dependence, and a substantial proportion of their daughters become single mothers and dependent on welfare. On the other hand, only a small proportion of the black children living in

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104 Sara McLan~an, Irunn Garfinicl, and Dorothy Watson mother-only families are socially isolated in severely poor urban black neighborhoods. Furthermore, although this proportion increased during the 1970s, it is ironic that the deteriorating condition of poor black neighborhoods resulted from economic and social gains made by the black population in general. On balance, we conclude that the growth of mother-only families is not associated with the growth of an underclass among whites, but it may be among some blacks. The extent to which the growth of a black underclass threatens to undermine the more general progress of blacks in America is worthy of further research. Government has always played some role in reducing the poverty and economic insecurity of mother-only families. As a consequence, policy-makers have continually faced and sought to resolve the dilem- ma over whether to give priority to reducing the poverty of single mothers or to reducing their prevalence and dependence. In the last section of the paper, we examine three recent developments in American federal income transfer policy and their effect on the economic well-being, self-reliance, and prevalence of mother-only families. The three policies are: (1) the reduction in the real value of transfer benefits, (2) the increase in the public enforcement of private child-support obligations, and (3) the increase in the public enforcement of work requirements for welfare recipients. We find that the falling level of benefits for single mothers brought about by a combination of inflation and budget cuts has had a substantial impact on the extent of their welfare dependence and only a trivial impact on prevalence. The work requirement leg- isIation has the potential to increase the earnings of single mothers if training is provided and jobs are available or guaranteed. It has not yet been implemented on a large scale, however, and questions re- main as to whether its potential will ever be realized. Child-support legislation, as currently enforced, will probably not have a big im- pact on poverty, welfare dependence, or prevalence. It does have the potential to substantially reduce poverty axed dependence if higher awards are secured and enforced in many more cases. PREVALENCE, GROWTH, AND CAUSES OF MOTHER-ON[Y FAMILIES In 1983 there were over 5.7 million families headed by single mothers in the United States, representing about 19 percent of all fannies (Bureau of the Census, 19843. Among whites, these families

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FAMILY STRUCTURE, POVERTY, AND THE UNDERCLASS 105 accounted for 14.3 percent of all families; among blacks, for about 48 percent. Altogether, mother-only families were fairly evenly dis- tributed across residential areas: about 42 percent lived in central cities, 32 percent lived in surrounding suburbs, and the remaining 27 percent lived in nonmetropolitan areas. The concentration among blacks was much greater, however, with about 64 percent living in central cities compared with 18 percent each in suburban and non- metropolitan areas. For blacks, then, the experiences (and problems) of mother-only families are closely related to the experiences of urban life. These figures on prevalence are based on cross-sectional data and offer only a snapshot of the proportion of families headed by single mothers at one point in time. This view understates the proportion of women and children who will ever live in a mother-only family because it misses all families in which the mother has remarried (or the children have grown and gone) and all families in which a marital disruption (or premarital birth) has not yet occurred. Demographers estimate that about 42 percent of the white children and about 84 percent of the black children born in the late 1970s will live for some time with a single mother before they reach the age of 18. The median duration in a mother-only family is 6 years for children of formerly married mothers and even longer for children born to never-married mothers (Bumpass, 1984; Hofferth, 1985~. Lends in the proportion of families headed by single women are depicted in Figure 1 for 194~1983. Trends for blacks and whites are quite similar, although single motherhood has always been more common among blacks. For whites, the proportion of mother-only families grew 37 percent during the 1960s and 40 percent during the 1970s; for blacks, the proportions were 37 percent and 35 percent, respectively. Figure 1 also presents the trends since 1960 for black and white families living in central cities. The upper lines for each group show that the trend in central cities tends to parallel that of the entire group, although the absolute level is higher in the former. During the 1970s, however, the trend lines for both races appear to rise faster in central cities than in the general population. Numerous explanations have been put forward to account for the growth of families headed by single mothers during the past few decades, and there is a vast literature of empirical studies that at- tempt to test many of these arguments. In the following sections, we briefly review and evaluate three major explanations for the in- creases in single motherhood: (1) increases in welfare benefits, (2)

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106 Sara McLanahan, Irwin Garfinicl, arid Dorothy Watson 60 55 50 45 40 25 20 10 5 o - White - Black Central City, White Central City, Black _ ~ f . ~ ~~ , I_; : - :/./ .~,r~ . 1 1 1 1 J - 1940 1950 1960 1970 1980 1983 Year FIGURE 1 The growth of mother-only families, 194~1983. SOURCE: Gar- finkel and McLanahan (1986~. increases in women's employment opportunities and marital conflict, and (3) declines in men's employment opportunities, especially those of young black men. Creases In Welfare Benefits Both common sense and economic theory suggest that raising public benefits to single mothers and their children will increase the number of mother-only families. Higher benefits increase the finan- cial ability of single mothers to establish their own households and thereby to become household heads. They enable a single mother to choose to keep her baby or have the baby adopted rather than have an abortion. Higher benefits also increase the ability of poor married mothers to choose divorce rather than remain in an unde- sirable relationship. In short, increases in benefits should increase the prevalence of single motherhood, all else being equal. Neither economic theory nor common sense, however, tells us how big any of these effects will be. The relationship between welfare and single motherhood has

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107 been examined in numerous studies, including time-series analy- ses, longitudinal studies, and cross-sectional comparisons. Some researchers have compared welfare benefits across states with the proportion or "stock" of families headed by women; others have compared benefit leveb with the "flows in and out" of single mother- hoodfor example, marital disruption and remarriage rates, illegiti- macy rates, and the propensity to establish independent households. Not surprisingly, studies that examine the correlation between welfare benefits and the stock of mother-only families are more likely to find effects than are studies that examine the effects of benefit levels on particular flows in and out of single motherhood. Studies of stocks conducted by Honig (1973), by Ross and Sawhill (1975), and most recently by Danziger and his colleagues (1982) all find an association of benefit levels with the number of female-headed households. Studies of flows, on the other hand, suggest that the as- sociation is due primarily to ejects on living arrangements and rates of remarriage (Cherlin, 1976; Hoffman and Holmes, 1976; Hutchens, 1969; Moore and Waite, 1976~. In response to the Honig study, Cut~rright and Madras (1976) demonstrated that benefit levels were associated with the proportion of single mothers who head their own households but not with the percentage of women who were divorced or separated. A more recent study by Ellwood and Bane (1984) confirmed these findings. After examining the effect of benefit levels on living arrangements, marital breakup, and premarital births, they con- cluded that the major consequence of welfare is that it allows single mothers to establish independent households. Furthermore, Ellwood and Bane also found that benefit levels are related to the proportion of divorced and separated mothers In the population but not to di- vorce rates. These results are consistent with an earlier finding by Hutchens (1969) and suggest that welfare affects the "flow outs of female headship (remarriage) but not the "flow ins (divorce). The empirical studies can be used to estimate the effects of increases in welfare benefits on the prevalence of single mothers. Be- cause some of the studies find no effect, a lower-bound estimate would be that the increase ~ benefits had no effect on prevalence between 1960 and 1975. If we use the highest estimate in the literature- Honig's estimate for blacks in 196~we estimate that the 196~1975 increase in welfare led to a 42 percent increase in single motherhood. In our judgment, however, the studies by Ellwood ~d Bane (1984) and by Danziger and his colleagues (1982) provide the most FAMILY STRUCTURE, POVERTY, AND THE UNDERCLASS . ,

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108 Sara McLanahan, Irwin Garfinicl, and Dorothy Watson. reliable sources from which to estimate the effect of increased govern- ment benefits on the formation of mother-only families: the Ellwood and Bane study because it is comprehensive and distinguishes be- tween effects on prevalence and eEects on living arrangements, and the Danziger study because it models the effects of alternative oppor- tunities. Using these studies, we estimate that the growth in benefits increased the prevalence of single motherhood by between 9 percent and 14 percent from 1960 to 1975. In view of the fact that the prevalence increased approximately 100 percent during this period, increases in welfare benefits account for no more than one-seventh of the overall growth. In short, although increased benefits may have led to a measurable increase in prevalence, they account for only a small portion of the total growth in mother-only families.) That the increase in government benefits played only a small role in the overall growth in families headed by single women does not mean that the effects of benefits on single motherhood should be ignored. It seems reasonable to assume that welfare benefits played little or no role in the marital decisions of women in the top half of the income distribution. If so, welfare must have played a bigger role in the decisions of those in the lower half. Thus, if the growth in benefits accounted for 15 percent of the total growth in single motherhood, it could possibly account for 30 percent of the growth within the bottom part of the income distribution. Moreover, as documented later in this paper, women who have grown up in mother-only families are more likely to become single parents themselves, illustrating how the effects can mushroom over time. Finally, the effects of increased welfare benefits on living arrangements are a cause for concern because there is some evidence that children in families with ~ The much publicized results from the Seattle-Denver income maintenance experiment (SIME/DIME) have been interpreted to show that the effect of welfare benefits on divorce is much greater than the foregoing summary indicates (Groeneveld et al., 1983~. The SIME/DIME results, however, say nothing about the effects of raising or lowering the welfare benefits available to single mothers. The experiment was implemented in a world that already had a welfare system, and families in both the experimental and control groups retained whatever eligibility they would have had in the absence of the experiment. Many single mothers in the control group and some in the experimental group received welfare. Consequently, whatever effect the experiment had on behavior, it cannot be attributed to the availability of additional income to women who became single heads of households. If divorce rates were higher in the experimental groups, this was due to something about the treatment other than an "independence" effect.

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FAMILY STRUCTURE, POVERTY, AND THE UNDERCLASS 109 other adults do better than children in families in which the mother is the only adult. Changes in Women's Employment Many people believe that the growth of mother-only families is due to greater participation in the labor force by women and, in particular, by married women with children. Some point to an ~inde- pendence effects that arises from increases in women's employment opportunities; others emphasize the wrote conflict" that accompanies the renegotiation of the traditional roles of husband and wife. Clearly, employment provides women with an alternative means of gaining financial security and thus competes with marriage and economic dependence on husbands. It also competes with traditional ideas about husband/wife roles by reducing the amount of time available for women to spend on housework and child care. The body of published empirical research in this area is nearly as large as the literature on welfare. It is also based on a variety of approaches, including analyses of time series, aggregate-level data, and survey data. For example, Preston and Richards (1975) examined the 100 largest standard metropolitan statistical areas (SMSAs) in the United States in 1960 and found that job opportunities, women's earnings, and unemployment were all good predictors of the marital status of women in the population. These researchers concluded that changes in job opportunities for men and women between 1960 and 1970 could account for about half of the decline in marriage during this period, or about half of the increase in single women. In her replication of the Preston and Richards study, however, White (1981) did not find a similar relationship for blacks. Another way to look at the question is to follow married women over time to see if working mothers are more likely to divorce and less likely to remarry than nonworking mothers. Several studies based on data from the Michigan Pane} Study of Income Dynamics (PSID) and the National Longitudinal Survey of Labor Market Experience (NES) have found that married women who work or who have higher earnings potential are more likely to divorce than more dependent women. Ross and Sawhill (1975) found that, controlling for hus- band^'s income and other factors, an increase of $1,000 in a wife's earnings was associated with a 7 percent increase in separation rates. Similarly, Cherlin (1976) found that a higher ratio of wife's earn- ings capacity to husband's earnings was a strong predictor of marital

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110 Sara McLanahan, Irwin Garfinicl, and Dorothy Wanton disruption. Taken together, these studies indicate that the increase in economic opportunities for women can account for a substantial part of the increase in single motherhood among whites. For black women, the change in employment is much smaller, and the overall effect appears to be much weaker. Changes in Men's Employment The most widely discussed hypothesis concerning male employ- ment comes from Moynihan (1965), who argued in the early 1960s that unemployment among black men was causing a breakdown of the black family. Moynihan's graphs for male unemployment rates and single motherhood rates showed a close relationship throughout the 1950s and early 1960s. During the late 1960s, however, the trends diverged. Extending Moynihan's time series into the 1970s, we find that both unemployment and single motherhood continue to rise, but overall the relationship is not as close as during the 1950s. In a time-series analysis (using lagged variables) for the the post-WorId War IT period, South (1985) found a statistically significant relation- ship between unemployment rates and divorce rates. He also found a positive and statistically significant effect of women's employment on divorce. Additional evidence for an effect of male unemployment on single motherhood comes from microleve! analyses of longitudinal and cross-sectional surveys. Using data from the PSID, several re- searchers found that the probability of marital disruption is greater for families in which the husband has been unemployed (Hoffman and Holmes, 1976; Ross and Sawhill, 1975~. Cherlin (1976) and Moore and Waite (1976), in separate studies based on the NES, found that the husband's working less than full-time as well as earning low wages increased the probability of marital disruption. A problem with these studies is that a third factor such as alcoholism may be leading to both unemployment (or low wages) and divorce. Presumably, however, there is less chance of such an omitted variable being correlated with aggregate variations in unemployment rates across cities. Again, numerous aggregate-level studies have found a relationship between high unemployment rates and low wages on the one hand and high single motherhood and divorce rates on the other hand (Honig, 1973; Minarik and Gol~farb, 1976; Ross and Sawhill, 1975). The most recent version of the male employment argument has

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FAMILY STRUCTURE, POVERTY, AND THE UNDERCLASS 111 been proposed by William Julius Wilson and his colleagues (Aponte et al., 1985; Darity and Myers, 1983; Wilson, 1985b; Wilson and Aponte, 1985; Wilson and Neckerman, 1986~. Like Moynihan, these researchers focus on black fannies and attribute the recent growth of mother-only families to increases in joblessness among black men. Their indicator, the "mate marriageable pool index," is the ratio of employed men per 100 women of similar age in the population. It is somewhat broader than indicators used by previous researchers because it takes into account not only unemployment but also par- ticipation in the labor force and sex differences in mortality and incarceration rates (Wilson and Neckerman, 1986~. Wilson points out that declines in the pool of marriageable black men between 1960 and 1980 were greatest in the North Central and Northeast regions of the country. These regions also showed the greatest growth in mother-only families. Wilson and his colleagues note that declines in employment among blacks were due initially to a shift in unskilled jobs from the South to the North and later to a loss of jobs in central cities in the North where blacks are highly concentrated.2 For example, during the 1970s, the number of un- skilled jobs declined by more than 30 percent in some cities (e.g., New York, Philadelphia, and Baltimore). Although the loss of Tow-skilled jobs in these areas was offset somewhat by an increase in higher- paying jobs, this shift worked to the disadvantage of black males, who are less likely to have a high-school degree (Kasarda, 19853. Given that the increase in single motherhood hap been especially pronounced among black women who have low levels of education- women whom we would have expected to marry men in low-skilled jobs the researchers conclude that the loss of jobs in the central cities is a major factor in the growth of mother-only families. THE FEMINIZATION OF POVERTY One of the most serious problems facing mother-only families is 2 The West, which accounts for only 9 percent of the total black population, did not fit the pattern. The marriageable pool of men in the West remained fairly constant while the number of female-headed families increased substantially. Wilson and Neckerman (1986) attribute this anomaly to the fact that black female heads of families in the West are more likely than are blacks in other parts of the country to be middle class and to behave more like whites. Thus, they should be expected to be more like whites in that they will respond to increases in opportunities for women rather than to declines in opportunities for men.

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112 Sara McLanahan, Irwin Garfinicl, and Dorothy Watson 60 50 o o _ 30 o UP 0 20 10 o Mother-Only Familles -ad Disabled _ ._ Aged Two-Parent Familles I I I I I I I I I 1 1 1 1 ~ 67 69 71 73 75 Year 77 79 81 83 FIGURE 2 Trends in poverty rates for mother-only families, two-parent fami- lies, persons over 65, and disabled persons, 1967-1983. SOURCE: Ross (1984~. poverty. Although not all of these fannies are poor, they face a much higher risk of poverty than other demographic groups. Roughly one out of two single mothers is poor, according to the official government definition of poverty. Figure 2 shows trends in the prevalence of poverty for mother-only families, two-parent families, aged persons, and disabled persons for 1967-1983. The figures include income from cash transfer programs such as Aid to Families with Dependent Children (AFDC), Social Security, and Disability Insurance (Ross, 1984~. Women and children in mother-only fannies are the poorest of all these groups, and the gap has been widening. In relation to the elderly and the disabled, their economic position has declined steadily cluring the past two decades. This does not mean that their absolute income has deteriorated, however. In fact, the poverty rate of those living in mother-only families actually declined until the late 1970s, only to rise again after 1978. If the econorruc status of mother-only families has not declined, why do we observe what some have called the "feminization of poverty"? The concept was introduced in 1978 by Diana Pearce (1978) and refers to the period between 1967 and 1978 when the pro- portion of the poor living in mother-only households was increasing. In 1967, 21.4 percent of the non-aged poor were living in households headed by single mothers, compared with 41.4 percent in two-parent households. By 1978, the pattern was reversed: 35 percent of the

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FAMILY STRUCTURE, POVERTY, AND THE UNDERCLASS 137 be some recipients who are at the margin between choosing welfare and another alternative. Some research also suggests that if the labor market is strong, a nontrivial proportion of single mothers on AFDC need little more than good professional help in locating jobs. For ex- ample, preliminary evidence from San Diego, where unemployment rates are well below average, indicates that job search assistance has been the most profitable service provided there (Gueron, 1986, 1987~. The effect of enforced work requirements on the prevalence of mother-only households depends on the extent to which the economic well-being of single mothers is improved and on the extent to which the relative earnings opportunities of men and women are altered. If enforcing work requirements increases the earnings of single mothers relative to those of men, single mothers will probably become less dependent both on men and on welfare. There are three reasons for caution in interpreting the above ev- idence in favor of compulsory work programs. First, whereas partic- ipation to date in most of the work and training programs evaluated has been voluntary, much of the current public discussion involves making work compulsory. Programs that involve significant elements of compulsion may be less profitable both to the beneficiaries and to society as a whole. Early experience with the workfare programs, however, suggests that to date, at least, enforcing work requirements also seems to be profitable (Gueron, 1986, 1987~. Second, and even more important, few single mothers of families in the work and training evaluations have had preschool-age children. The child-care costs for such children could easily be so high as to offset the earnings gains of the program. Long-run earnings gains could more than make up for child-care costs, but the opposite is equally possible. This issue warrants more experimentation and study. Finally, it may be unrealistic to expect single mothers to work full-time, year round. As Ellwood (1985) points out, the only way that most single mothers can be self-supporting is by working full- time, full-year. Such complete participation in the labor force is the exception rather than the rule among all mothers, contrary to popular belief. Single mothers already work more hours than wives in married-couple households: 35 percent of single mothers with children under 6 work at least 1,500 hours per year, compared with 23 percent for comparable wives. Similarly, 50 percent of single mothers with older children are fully employed, compared with 37 percent of wives. Working 1,500 hours or more remains the exception,

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138 Sara McLanahar`, Irunn Garfinicl, arid Dorothy Watson not the rule, for all mothers. Ellwood argues that, because the norm is for mothers to spenc] considerable time with their children, it may be unrealistic to expect behavior from single mothers that deviates markedly from this norm (Ellwood, 1985~. This is especially true because work requirements impose a dual role on single mothers: because only one parent is present, that parent must undertake the roles of both caretaker and breadwinner. Requiring single mothers to work for their welfare checks places a heavy burden on them. Child Support Congressional interest in enforcing child support grew as the proportion of AFDC children with absent fathers grew. The biggest burst of federal legislation on child support followed hard on the heels of the 1965-1975 growth in the welfare rolls. In addition, a consensus had developed that the existing child-support system condoned parental irresponsibility. A special study conducted by the Census Bureau in 1979 found that only 59 percent of women with children potentially eligible for support were awarded payments. Of those awarded payments, only 49 percent received the full amount due them and 28 percent received nothing. In addition, award levels and enforcement efforts were arbitrary and inequitable (Bureau of the Census, 1981a). The milestone 1976 act created federal and state offices of child support enforcement the public bureaucratic machinery to enforce the private obligation to support one's children. During the 7 years that followed, several new acts strengthened this machinery. Then, in 1984, Congress unanimously enacted by far the strongest federal child-support legislation, requiring all states to enact laws that with- hold from wages all future chiTd-support payments once the obligor is delinquent in payments for one month. The legislation also re- quires states to appoint commissions to design statewide guidelines for child-support standards. The 1984 act requires state child-support offices to provide as- sistance to nonwelfare as well as welfare cases. Although states may charge for these services and thereby target subsidies toward the poor, the service itself is provided universally to rich and poor custodial parents. The contrast between the restrictions for AFDC eligibility and the universalization of eligibility for child-support en- forcement services could not be more stark.

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FAMILY STRUCTURE, POVERTY, AND THE UNDERCLASS 139 Because the 1984 child-support legislation is so recent, an as- sessment of its effects relies heavily on theoretical expectations and rough empirical estimates. The incomes of mother-only fannies can increase as a result of the withholding of wages of the delinquent supporting parent; they can also increase depending on the state guidelines for determining child-support obligations, the incentives of states to increase non-AFDC collections, and the incentives for interstate collection of child support. The size of the increase will depend on how the 1984 legislation is implemented on both the fed- eral and state levels. There will be few positive effects if the states enact weak standards and neither the number nor the amount of child-support awards increases much; if the states fait to effectively enforce the new law for withholding wages; and if federal, state, and local resources to enforce child support are cut. On the other hand, further strengthening of child-support enforcement could greatly- in- crease the incomes of mother-only families. To estimate the potential effect of child-support enforcement, we explored what would happen if all children potentially eligible for support obtained a child-support award based on some agreed- upon standard, and what the outcome would be if all such children received the full amount due them. According to a simple percentage- of-income standard used in Wisconsin, the child-support obligation is equal to 17 percent of the gross income of the noncustodial parent for one child, 25 percent for two, 29 percent for three, 31 percent for four, and 34 percent for five or more children. (In our calculation, we tax only the first $50,000 of income for child support.) Using this standard, we estimate that the incomes of families headed by women would increase by more than $10 billion (Garfinke! and McLanahan, 1986~. The poverty gap would be reduced by nearly $2 billion. These estimates should be considered an upper bound, however, because even the most efficient collection system would fall short of 100 percent collection. Increased enforcement of child support will raise the incomes of some single mothers who receive AFDC high enough to enable them to leave welfare. The precise effect of the child-support legislation on welfare dependence will vary according to the extent that collections will increase as a result of wage withholding and the new state standards, on the one hand, and the effect of the increased collections on caseloads, on the other. Some crude estimates are that (a) if existing awards are used as a standard, caseloads could be reduced by less than 5 percent; (b) if the Wisconsin standard described above

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140 Sara McLanahan, Irwin Garfirzlel, and Dorothy Watson' is used, caseloads would decrease by 25 percent. Again, this estimate is an upper bound because it assumes a 100 percent collection rate. Still, even 100 percent collection of child-support obligations de- rived from any reasonable standard would leave the overwhelming majority of AFDC recipients no better off than they were in the absence of the program. This situation prevails because most non- custodial parents of AFDC children do not earn enough to pay as much child support as their children are already receiving in AFDC benefits. Programs to increase the employment and earnings of poor noncustodial fathers would help. But even the best program imagin- able would still leave a large proportion of the AFDC caseload poor and dependent on government benefits. Most of the increases in collections of child support for families on welfare will accrue to the government in the form of AFDC savings. Low-income families on AFDC can share in some of the i] ~ ~~ .. ~ . .~ . . . . _ . increased collections ot child support in two ways. one approach is to ignore some of the child support payment in calculating AFDC grants. Congress has required all states to ignore the first $50 per month. That requirement modestly increases the incomes of mother- only families on AFDC in which there is a living, noncustodial father who makes child-support payments. It also increases by a small amount the number of mother-only families who will continue to receive AFDC. An alternative approach is to use the increased child-support col- lections to help fund a nonwelfare benefit that encourages work. This approach is being pursued on a demonstration basis in Wisconsin. Under the Wisconsin child-support assurance system, child-support obligations are determined by a simple legislated formula that was described above. The obligation is withheld from wages and other sources of income in all cases, just as income and payroll taxes are. The child is entitled to receive either the money paid by the noncusto- dial parent or an assured child-support benefit, whichever is greater. Thus, the savings in AFDC that result from increased child-support collections are funneled back into the system, in the form of assured benefits and wage subsidies, to increase the economic well-being of fannies with children eligible for child support.~3 i3The state of Wisconsin is also considering a work expenses subsidy of $1.50 an hour to the custodial parent. Child-support legislation could address two dimensions of the disadvantage suffered by families headed By single women: the low earnings of mothers relative to fathers and the lack of support from the absent parent. Child-support legislation in general attempts to tackle the latter

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FAMILY STRUCTURE, POVERTY, AND THE UNDEROLASS 141 We estimate that such a program could reduce the poverty gap among American families potentially eligible for child support by more than a third and AFDC caseloads by more than a half, and even reduce total public expenditures. The effects on poverty and welfare do not depend on how much collection improves, but the costs do. If 100 percent of the Wisconsin standard were collected, the program would save $2.4 billion. If only 70 percent were collected, the net cost would be about $60 million. One criticism of the child-support assurance program is that it will benefit only those mothers who work. For those who are unable to work or who cannot find jobs or who simply prefer to take care of their children full-time, the program provides nothing. By contrast, the $50 per month set-aside that Congress enacted in 1984 provides more for this group than the child-support assurance program. Thus, the success of this latter approach will hinge largely on the extent to which both poor custodial mothers and poor noncustodial fathers work. Enhanced enforcement of child support is, on balance, likely to reduce the prevalence of families headed by single women. It is also likely to reduce out-of-wedlock births by giving men an incentive to take responsibility for birth control. In order for enforcement of child support to have an appreciable effect on out-of-wedIock births, however, there would have to be a sizable increase in the number of cases in which paternity is established. Enforcement of child support may also reduce divorce by making it financially more difficult for the noncusto(lial parent. The impact of stronger enforcement on the behavior of the prospective custodial parent is likely to be smaller because welfare already exists as an alternative means of support. issue by enforcing parental responsibility; in contrast, the Wisconsin assured benefit program represents an attempt to tackle the issue of the mother's earnings as well, both by providing an assured benefit and by providing a wage subsidy.

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