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OCR for page 102
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-
hood—for 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
OCR for page 140
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
OCR for page 141
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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142
Sara McLanahan, Irunn Garfinkel, and Dorothy Watson
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Representative terms from entire chapter:
families headed
