Academic journal article Journal of Sociology & Social Welfare

Economic Mobility of Single Mothers: The Role of Assets and Human Capital Development

Academic journal article Journal of Sociology & Social Welfare

Economic Mobility of Single Mothers: The Role of Assets and Human Capital Development

Article excerpt

This study examines the economic mobility of single mothers. It highlights the relationships between single mothers' financial assets and human capital development (educational advancement, job training, and work hours) with their economic mobility. Analysis of data from the National Longitudinal Survey of Youth (NLSY79) indicates that assets may help improve upward economic mobility. Assets, however, have differential impact on single mothers with different income levels. In addition, human capital development mediates the positive link between assets and the economic mobility for mothers living between the 100% and 200% federal poverty. These results support asset building as an investment strategy to enhance the long-term economic well-being of single mothers. The findings also underscore the importance of examining within-group variations among single mothers in designing effective asset-building policies and programs.

Key words: economic mobility, human capital, single mothers

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The rapid increase of single-mother families in the past decades and the higher poverty rates among these families have been widely recognized (Fields & Casper, 2001; McLanahan & Booth, 1989; McLanahan & Kelly, 1999; McLanahan & Sandefur, 1994; Nichols-Casebolt & Krysik, 1997). Studies also found that compared with other groups, female-headed households have experienced lower upward economic mobility (Caputo, 1999; Weinstein, 2000). These studies indicate that contributing factors to the economic hardship of single mothers include their low earning capacity, low job opportunities in economically depressed areas, and meager public benefits.

This research, however, has not paid adequate attention to the impact of assets on the economic mobility of single mothers. Interest in asset accumulation for low-income families has increased in recent years in both policy and academic discussions. Studies show that increasing asset inequality has become much more prominent than that of income (Oliver & Shapiro, 1995; Wolff, 2001). Single mothers accumulate fewer assets compared to the general population (Bernheim & Scholz, 1993; Carney & Gale, 1999; Schmidt, 2004; Yamokoski & Keister, 2004). Lack of asset accumulation may not only contribute to the lower economic status of single mothers, but, perhaps more important, restrict their economic mobility (Sherraden, 1991).

Furthermore, while theory suggests different potential pathways through which assets may enhance economic status (Sherraden, 1991; Shobe & Page-Adams, 2001), empirical research has not examined possible mechanisms by which asset holding may impact the economic success (Scanlon & Page-Adams, 2001). Studies also indicate that the impact of assets on the economic well-being of single mothers may vary by their specific life circumstances (Edin, 2001). Existing research has sparsely examined these possible differences yet.

To address these issues, this study explores the associations between financial assets and human capital development with economic mobility between 1994 and 2000. Specifically, this study seeks to answer the following research questions. First, what is the relationship between single mothers' assets and their upward economic mobility? Second, do assets impact the economic mobility of single mothers through its influence on their human capital development? Third, does the impact of assets on the economic mobility vary by the income levels of single mothers?

Understanding the dynamic relationships between assets, human capital development, and the economic status of single mothers is particularly important in the context of welfare policy. The implementation of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996 has focused on individual responsibility for long-term economic well-being. While welfare caseload has largely decreased since the welfare reform, many welfare leavers face precarious financial circumstances (Anderson & Gryzlak, 2002; Cancian, 2001; Loprest, 2001). …

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