Abstract: The goal of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) was to end the dependency of needy parents on government benefits, in part by promoting marriage; the pre-reform welfare system was widely believed to discourage marriage because it primarily provided benefits to single mothers. However, welfare reform may have actually decreased the incentives to be married by giving women greater financial independence via the program's new emphasis on work. This paper uses Vital Statistics data on marriages and divorces during 1989-2000 to examine the role of welfare reform and other state-level variables on marriage and divorce rates. The results indicate that implementation of TANF is negatively associated with marriage and divorce rates, as are pre-TANF waivers from the AFDC program in some specifications.
JEL classification: I3, J1
Key words: welfare reform, marriage, divorce
The U.S. welfare system underwent dramatic change during the 1990s, beginning with various state-implemented experimental programs and culminating in passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996. A primary goal of PRWORA was to end the dependency of needy parents on government benefits by promoting marriage as well as by encouraging job preparation and work. (1) Although there is a burgeoning literature on the effect of welfare reform on welfare caseloads, women's labor force outcomes and children's well being (e.g., Bell 2001; Schoeni and Blank 2000), few studies have examined whether welfare reform has affected transitions into and out of marriage. The effect of the welfare system on marital transitions has considerable policy implications given the recent plan by the Bush administration to use federal funds to promote marriage as an alternative to public assistance.
Prior to the 1990s reforms, the welfare system was widely regarded as providing disincentives to marriage because it primarily allocated benefits to single women with children. Some studies have concluded that more generous welfare programs were associated with higher rates of female household headship and nonmarital fertility and lower rates of marriage (e.g., Hoynes 1997; Moffitt 1992; Moffitt 1998; and the references therein). (2) Welfare generosity appears to be positively associated with divorce, although empirical findings tend to be weaker than for other outcomes related to family structure (e.g., Ellwood and Bane 1985; Hoffman and Duncan 1995). The estimated effects generally appear to be relatively small in magnitude and cannot explain the secular decline in U.S. marriage rates and rise in divorce rates since the 1960s, a period during which average real welfare benefits declined.
Welfare reform was designed to encourage marriage and the formation of two-parent families as well as promote work and job training. The reforms, which recast Aid to Families with Dependent Children (AFDC) as Temporary Assistance for Needy Families (TANF), gave states extreme flexibility in determining eligibility rules as well as benefit levels. Many states opted to extend eligibility to considerably more two-parent families than were previously eligible for benefits. (3) Although few provisions of PRWORA were directly aimed at encouraging marriage, the imposition of time limits and other restrictions were implicitly designed to promote marriage (Moffitt, 2002a). However, as Moffitt (2002b) notes, extending welfare to two-parent families may not necessarily encourage marriage because some women will meet the TANF income eligibility requirements if they are single but not if they are married to a spouse with earned income, reducing their incentive to marry. In addition, welfare reform also may have indirectly reduced the incentives for marriage if the increased emphasis on work leads to greater financial independence for women, thereby reducing the need or desire to be married. …