The well-being of single mothers has been a topic of much interest among policymakers and researchers, particularly with the passage of PRWORA. Because increased employment was a central goal of the 1996 welfare reform, the labor market participation of single mothers has been a primary focus of the welfare literature. Several nationally representative studies have linked welfare reform and other policy changes to increased employment among single mothers (Meyer and Rosenbaum 2000; Blank and Schmidt 2001). Similarly, state studies of welfare leavers uniformly find high rates of employment. In a synthesis of ASPE-funded state studies, Acs and Loprest (2001) report that the median employment rate of single parents one year after leaving welfare was about 70 percent.
Despite high average levels of employment among former welfare recipients, evidence of a large degree of employment churning exists. For example, in a longer-term study of TANF recipients in Wisconsin, Wu et al. (2005) found that nearly 40 percent of their sample had patterns of unstable employment levels over a six-year follow-up period. Johnson and Corcoran (2003) also present evidence of a high degree of job instability and limited mobility to better quality jobs among welfare participants in Michigan. Wood et al. (2004) examine the poverty patterns of former welfare recipients in a study of current and former TANF recipients in New Jersey and find that, after leaving poverty, transitions back into poverty are common. Of the people in their sample who had left poverty by the second year after entering TANF, more than half returned to poverty during the ensuing three years.
Our review of the findings of the relevant literature highlights the facts that (1) incidence of poverty is much higher among our target population of single mothers, and (2) the factors underlying poverty transitions are somewhat different for single mothers than for the general population. The review of research from the recent welfare literature on the employment and poverty patterns among current and former welfare participants suggests a great deal of heterogeneity in the experience of mothers participating in welfare who leave poverty. However, little is known about the success, or lack thereof, of single mothers following poverty exits, particularly in the post-PRWORA period. The objective of this study is to help fill this void by using longitudinal data on a large, nationally representative sample of single mothers to present a detailed picture of their income, employment, and earnings during the period following poverty exit and to identify factors associated with successful exits from poverty.