With the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), policymakers and researchers have recognized the importance of employment and earnings as a key way out of poverty and dependency for single mothers. During the middle and late 1990s, the Temporary Assistance for Needy Families (TANF) program, aided by a strong economy, helped move many recipients off the welfare rolls and into work. Several studies have looked at the labor force transitions of former welfare recipients, but few have focused on earnings and income progression, poverty dynamics, and the pathways out of poverty for single mothers (including those who have never received welfare). Single mothers represent a group vulnerable to extensive contact with poverty, and it is important to discern their prospects for long-term self-sufficiency.
This study seeks to broaden knowledge about the extent to which single mothers remain out of poverty and the factors most strongly associated with their continued economic progress. We used the 2001 Survey of Income and Program Participation (SIPP) data, collected by the U.S. Bureau of the Census, to examine the income and employment experiences of single mothers who exited poverty. We identified single mothers who exited poverty during 2001, and tracked their experiences over the subsequent two-year period.
In our study, we started by focusing on the following two sets of questions:
- Who are single mothers who exit poverty and what are their reasons for exiting? How common are poverty and poverty exits among single mothers? Do the characteristics of single mothers who exit poverty differ from those of single mothers who do not exit poverty? What proportion exits poverty because of a change in employment and earnings or a change in family composition?
- How long do single mothers who exit poverty stay out of poverty? What are the main reasons these single mothers reenter poverty? How long are their subsequent poverty spells? How common is poverty cycling?
Based on the duration of their non-poverty and poverty spells during the two-year follow-up period, we found that single mothers who exit poverty can be classified into three groups: 28 percent who exit poverty and never return, 56 percent who cycle in and out of poverty, and 16 percent who return to poverty and stay poor. Poverty dynamics differ markedly across these three distinct groups of single mothers. Thus, the remainder of our study focused on the following two sets of additional questions:
- Who are single mothers who exit poverty and stay out of poverty? How do their characteristics differ from those who cycle in and out of poverty and those who return to and remain in poverty? What are the characteristics of single mothers in each group? Do the reasons single mothers exit poverty differ across these groups?
- What are the income, employment, and welfare receipt experiences of single mothers across the three groups? How do their experiences differ? What proportion of months do they spend out of poverty? What are their employment and welfare experiences? What factors are associated with their economic success?
The remainder of this introductory chapter is in four sections. First, we present background information for the study and review the related literature. Second, we briefly summarize data, samples, and key definitions for the study, and third, discuss our analytic approach. Fourth, we provide a brief summary of study findings. We conclude with a roadmap to the rest of the report.