June 5, 1996 | Backgrounder on Welfare and Welfare Spending
The Stand for Children rally, held in Washington on June 1, called attention to the plight of the nation's children. However, the unstated, underlying goal was to defend the continuing growth of the welfare system and implicitly to criticize those in Congress who have sought to reform it. Thus, while the Stand for Children event properly called attention to the disastrous condition of America's children, it is important to recognize that children are suffering precisely because of the governmental policies supported over the last 25 years by the leading organizations promoting the rally.
The simple fact is that children are suffering because the U.S. welfare system has failed. Designed as a system to help children, it has ended up damaging and abusing the very children it was intended to save. The welfare system has failed because the ideas upon which it was founded are flawed. The current system is based on the assumption that higher welfare benefits and expanded welfare eligibility are good for children. According to this theory, welfare reduces poverty, and so will increase children's lifetime well-being and attainment. This is untrue. Higher welfare payments do not help children; they increase dependence and illegitimacy, which have a devastating effect on children's development.
Americans often are told that the current welfare system does not promote long-term dependence. This also is untrue.
It is welfare dependence, not poverty, that has the most negative effect on children. Recent research by Congressional Budget Office Director June O'Neill shows that increasing the length of time a child spends on welfare may reduce the child's IQ by as much as 20 percent.
Welfare dependency as a child has a negative effect on the earnings and employment capacity of young men. The more welfare income received by a boy's family during his childhood, the lower the boy's earnings will be as an adult, even when compared to boys in families with identical non-welfare income.
Welfare also plays a powerful role in promoting illegitimacy. Research by CBO Director O'Neill also shows, for example, that a 50 percent increase in monthly AFDC and food stamp benefit levels will cause a 43 percent increase in the number of illegitimate births within a state. Illegitimacy, in turn, has an enormous negative effect on children's development and on their behavior as adults. Being born outside of marriage and raised in single parent homes:
Overall, welfare operates as a form of social toxin. The more of this toxin received by a child's family, the less successful the child will be as an adult. If America's children are to be saved, the current welfare system must be replaced. The automatic and rapid growth of welfare spending must be curtailed. Welfare should no longer be a one-way handout; recipients should be required to work for benefits received. Steps must be taken to reduce future illegitimacy, beginning with restricting cash welfare to unmarried teen mothers.
Finally, Americans must help children rise upward out of poverty and despair by enlisting the support of those institutions that have a record of real success. The evidence is clear that religious institutions have enjoyed dramatic success in reducing teen sexual activity, crime, drug use, and other problems among young people. In order to help poor children, America must rely on the healing and guiding force of the churches. This can be done by giving poor parents government-funded education vouchers which could be used to send their children to private schools, including religious schools.
The Failed Liberal Paradigm
The liberal welfare state is founded on faulty logic. This flawed logic, embedded in nearly all liberal thinking about welfare, runs something like this:
From this logic has sprung a relentless 30-year effort to raise welfare benefits, expand welfare eligibility, create new welfare programs, and increase welfare spending. The recent reform legislation passed by Congress sought to slow the automatic growth of welfare spending. Thus, it violated the cardinal tenets of the liberal welfare system, leading to cries of alarm from the welfare establishment and a prompt veto by President Bill Clinton.
In fact, each of the central tenets of modern welfare is misleading and deeply flawed. Together, they become a recipe for a disastrous system of aid which harms rather than helps, aggressively crushing the hopes and future of increasing numbers of young Americans. It is useful to examine each of these cardinal liberal tenets individually.
CLAIM 1: Raising incomes is crucial to the well-being and success of children. The common liberal corollary to this premise is that poverty causes such problems as crime, school failure, low cognitive ability, illegitimacy, low work ethic and skills, and drug use. Hence, reducing poverty through greater welfare spending will reduce most social problems. History refutes this belief. In 1950, nearly a third of the U.S. population was poor (twice the current rate). In the 1920s, roughly half of the population was poor by today's standard. If the theory that poverty causes social problems were true, we should have had far more social problems in those earlier periods then we do today. But crime and most other social problems have increased rather than fallen since these earlier periods.
History and common sense both show that values and abilities within families, not family income, lead to children's success. Families with higher incomes tend to have sound values concerning self-control, deferred gratification, work, education, and marriage which they pass on to their children. It is those values, rather than the family income, that are key to the children's attainment. Attempting to raise the family income artificially through welfare is very unlikely to do much to benefit the child, but it is likely to destroy the very values that are key to the child's success.
CLAIM 2: It is very easy to raise family income through welfare. This also is untrue. Because welfare reduces work effort and promotes illegitimacy and poverty-prone single-parent families, it actually may cause an overall decrease in family incomes. Welfare is extremely efficient at replacing self-sufficiency with dependence but relatively ineffective in raising incomes and eliminating poverty.
CLAIM 3: Higher welfare benefits and broadened eligibility will help children and improve their success in later life. In certain limited cases, such as when it is needed to eliminate serious malnutrition, welfare can help. But there is no evidence that enlarging benefits and expanding enrollments in most U.S. welfare programs will improve children's lives.
The Truth About Welfare
In contrast to the failed premises of welfare liberalism are the following hard facts about welfare and children:
Overall, the wider and more generous the welfare "safety net," the greater the problems of dependence and illegitimacy will become, and the greater the harm to children.
Examining Welfare's Impact on Children
The available scientific evidence clearly refutes the liberal hypothesis that attempting to raise family income through more generous welfare payments will benefit children. For example, the average monthly value of welfare benefits (AFDC and food stamps combined) varies between states. The conventional liberal assumption is that children on welfare in states with lower benefit levels will be markedly worse off than children in states with higher benefits. Children on AFDC in high-benefit states, according to the theory, should have improved cognitive ability when compared to children without access to more generous welfare. However, research published in 1994 by now-Congressional Budget Office Director June O'Neill and Anne Hill of Queens College, City University of New York, demonstrates that this theory is incorrect. O'Neill and Hill examined the IQs of young children who were long-term welfare dependents, having spent at least half of their lives on AFDC. Contrary to the expected theory, they found that the higher welfare benefit did not improve children's cognitive performance. The IQs of long-term welfare-dependent children in low-benefit states were not appreciably different from those in high-benefit states.1
Moreover, this picture is overly optimistic. In restricting the sample to long-term dependent children, the analysis ignores the effects of higher welfare benefits in encouraging welfare enrollment and lengthening the time spent on welfare. O'Neill and Hill have shown that a 50 percent increase in monthly AFDC and food stamp benefit levels will lead to a 75 percent increase in the number of mothers with children enrolling in AFDC and a 75 percent increase in the number of years spent on welfare.2 3
Once the effects of increased dependence are included, it becomes clear that higher welfare benefits have a decisively negative effect on children. Comparing children who were identical in social and economic factors such as race, family structure, mothers' IQ and education, family income, and neighborhood residence, Hill and O'Neill found that the more years a child spent on welfare, the lower the child's IQ. The authors make it clear that it is not poverty but welfare itself which has a damaging effect on the child. Examining the young children (with an average age of five-and-a-half), the authors found that those who had spent at least two months of each year since birth on AFDC had cognitive abilities 20 percent below those who had received no welfare, even after holding family income, race, parental IQ, and other variables constant. 4
O'Neill and Hill conclude:
Our findings of a negative impact of a welfare environment are particularly troubling. After controlling for the effects of a rich array of characteristics, a mother's long-term welfare participation is associated with a significant reduction in her child's [IQ] score and this effect is reinforced by the mother's having grown up in an underclass neighborhood, defined as one with a high proportion of welfare recipients. Although long-term welfare recipients are generally poor, persistent poverty does not seem to be the main reason for the poor performance of these children. Moreover, our analysis suggests that policies that would raise the income of children on welfare simply by increasing AFDC benefits are not likely to improve cognitive development. Children on welfare in high benefit states do not perform measurably better than their counterparts in low benefit states. 5
More Evidence on Welfare's Negative Impact
A similar study by Mary Corcoran and Roger Gordon of the University of Michigan shows that receipt of welfare income has negative effects on the long-term employment and earnings capacity of young boys. The study shows that, holding constant race, parental education, family structure, and a range of other social variables, higher non-welfare income obtained by the family during a boy's childhood was associated with higher earnings when the boy became an adult (over age 25). 6 However, welfare income had the opposite effect: The more welfare income received by a family while a boy was growing up, the lower the boy's earnings as an adult.17
Typically, liberals would dismiss this finding, arguing that families which receive a lot of welfare payments have lower total incomes than other families in society, and that it is the low overall family income, not welfare, which had a negative effect on the young boys. But the Corcoran and Gordon study compares families whose average non-welfare incomes were identical. In such cases, each extra dollar in welfare represents a net increase in overall financial resources available to the family. This extra income, according to conventional liberal welfare theory, should have positive effects on the well-being of the children. But the study shows that the extra welfare income, even though it produced a net increase in resources available to the family, had a negative impact on the development of young boys within the family. The higher the welfare income received by the family, the lower the earnings obtained by the boys upon reaching adulthood. The study suggests that an increase of $1,000 per year in welfare received by a family decreased a boy's future earnings by as much as 10 percent.8
Other studies have confirmed the negative effects of welfare on the development of children. For example, young women raised in families dependent on welfare are two to three times more likely to drop out and fail to graduate from high school than are young women of similar race and socioeconomic background not raised on welfare. 9 Similarly, single mothers raised as children in families receiving welfare remain on AFDC longer as adult parents than do single mothers not raised in welfare families, even when all other social and economic variables are held constant.10
Welfare Promotes Illegitimacy11
The welfare system does added harm to children by promoting illegitimacy. The anti-marriage effects of welfare are simple and profound. The current welfare system may be conceptualized best as a system that offers each single mother with two children a "paycheck" of combined benefits worth an average of between $8,500 and $15,000, depending on the state. 12 The mother has a contract with the government: She will continue to receive her "paycheck" as long as she does not marry an employed man.
As long as a father and mother remain unmarried, they may obtain income from two sources: the mother's welfare and the father's earnings. However, if the parents marry they must rely on the father's earnings alone. Welfare thus has made marriage economically irrational for most low-income parents. It has transformed marriage from a legal institution designed to protect and nurture children into an institution that financially penalizes nearly all low-income parents who enter into it.
Similarly, welfare has made it possible to raise a child without either the father or the mother having to hold a job. Welfare thus has made a father with low education and skills at best financially irrelevant -- and at worst a net financial handicap to the mother and the child. Welfare has worked like an acid, slowly corroding the social foundation of marriage in low-income communities. All parties -- the father, the mother, and especially the child -- are damaged by this.
Largely because of welfare, illegitimacy and single parenthood have become the conventional "lifestyle option" for raising children in many low-income communities. As Washington Post reporter Leon Dash has shown in his book When Children Want Children, most unwed teen mothers conceive and deliver their babies deliberately rather than accidentally. 13 While young women do not bear unwanted children in order to reap "windfall profits" from welfare, they are very much aware of the role welfare will play in supporting them once a child is born. Thus, the availability of welfare plays an important role in influencing a woman's decision to have a child out of wedlock.
In welfare, as in most things in life, you get what you pay for. The current welfare system pays for non-work and non-marriage and has achieved dramatic increases in both. Scientific research confirms that welfare benefits to single mothers contribute directly to the rise in illegitimate births. June O'Neill's research has found that, holding constant a wide range of other variables such as income, parental education, and urban and neighborhood setting, a 50 percent increase in the monthly value of AFDC and food stamp benefits led to a 43 percent increase in the number of out-of-wedlock births. 14 Other studies showing the effect of welfare in increasing illegitimacy are listed in the appendix to this paper.
The Social Consequences of Rising Illegitimacy
From the very beginning, children born outside of marriage have life stacked against them. The impact on the child is significant and can be permanent. Out-of-wedlock birth and growing up in a single-parent family means the child is more likely to experience:
Such children are far more likely to:
The absence of married parents is related to retarded
development in early childhood
Illegitimacy leads to delays in development. A study of black infants (aged 5 to 6 months) living in households of lower socioeconomic status in America's inner cities found that male infants who experienced "minimal interaction with their fathers" had significantly lower levels of overall mental development and lower social responsiveness for novel stimuli. 15 Illegitimate children tend to have lessened cognitive development. 16 17 18 Many of these children have problems in controlling their activity (popularly called "hyperactivity"). This lack of control usually is an indication of problems in learning that will arise later in the child's development. 19 The effect on boys is greater, at least in the early years. 20 21
Similar findings were enumerated again in the recent 1992 National Institute of Child Health and Development summary, "Outcomes of Early Childbearing: An Appraisal of Recent Evidence." 22 And such findings are in line with earlier studies. For instance, Project TALENT, a federal survey commissioned in 1960, which tracked the development of 375,000 high school students from 1960 through 1971, found that children born outside marriage were likely to have lower cognitive scores, lower educational aspirations, and a greater likelihood of becoming teenage parents themselves. Once again, all of these effects were greater for boys. 23
The absence of married parents risks emotional and behavioral
problems during childhood
The effects of illegitimacy continue to compound through childhood. The National Health Interview Survey of Child Health (NHIS-CH) confirms that children born out of wedlock have far more behavioral and emotional problems than do children in intact married families. These problems include:
Children raised by never-married mothers have significantly higher levels of all of the above behavior problems when compared to children raised by both biological parents. When comparisons are made between families that are identical in race, income, number of children, and mother's education, the behavioral differences between illegitimate and legitimate children actually widen. Compared to children living with both biological parents in similar socioeconomic circumstances, children of never-married mothers exhibit 68 percent more antisocial behavior, 24 percent more headstrong behavior, 33 percent more hyperactive behavior, 78 percent more peer conflict, and 53 percent more dependency. Overall, children of never-married mothers have behavioral problems that score nearly three times higher than children raised in comparable intact families.44 24
Children born out of wedlock have less ability to delay gratification and poorer impulse control (control over anger and sexual gratification). They have a weaker sense of conscience or sense of right and wrong. 25 Adding to all this is the sad fact that the incidence of child abuse and neglect is higher among single-parent families. 26
Being born out of wedlock increases the probability of teen
Boys and girls born out of wedlock and raised by never-married mothers are two-and-a-half times more likely to be sexually active as teenagers when compared to legitimate children raised in intact married-couple families. This finding applies to both blacks and whites. Children born out of wedlock whose mothers marry after the child's birth appear to be slightly less likely to be sexually active as teens but are still twice as active, on average, as legitimate teens of intact married couples. 27
The absence of married parents is related to poor academic performance during school years. The risks and consequences of illegitimacy continue through the middle years of childhood and express themselves in poor academic performance. A 1988 study by Sheila F. Krein and Andrea H. Beller of the University of Illinois finds that the longer the time spent in a single-parent family, the lower the education attained by a child. In general, a boy's educational attainment was cut by one-tenth of a year for each year spent as a child in a single-parent home. Controlling for family income did not reduce the magnitude of the effect noticeably. 28 These findings are confirmed again and again in studies, conducted in the United States and abroad, which which demonstrate that illegitimacy is also associated with lower job and salary attainment. 29 30 31
The absence of married parents leads to intergenerational illegitimacy. Being born outside of marriage significantly reduces the chances the child will grow up to have an intact marriage. 32 Children born outside of marriage themselves are three times more likely to be on welfare when they grow up. 33 Daughters of single mothers are twice as likely to be single mothers themselves if they are black, and only slightly less so if they are white. 34 And boys living in a single-parent family are twice as likely to father a child out of wedlock as are boys from a two-parent home. 35 The TALENT study, noted earlier, already had found that children born to teenage parents are more likely to become teen parents themselves. 36
Illegitimacy is a major factor in America's crime wave
Lack of married parents, rather than race or poverty, is the principal factor in the crime rate. It has been known for some time that high rates of welfare dependency correlate with high crime rates amo ng young men in a neighborhood. 37 But more important, a major 1988 study of 11,000 individuals found that "the percentage of single-parent households with children between the ages of 12 and 20 is significantly associated with rates of violent crime and burglary." The same study makes clear that the widespread popular assumption that there is an association between race and crime is false. Illegitimacy is the key factor. The absence of marriage, and the failure to form and maintain intact families, explains the incidence of high crime in a neighborhood among whites as well as blacks. This study also concluded that poverty does not explain the incidence of crime. 38 This is a dramatic reversal of conventional wisdom.
Research on underclass behavior by Dr. June O'Neill confirms the linkage between crime and single-parent families. Using data from the National Longitudinal Survey of Youth, O'Neill found that young black men raised in single-parent families were twice as likely to engage in criminal activities when compared to black men raised in two-parent families, even after holding constant a wide range of variables such as family income, urban residence, neighborhood environment, and parents' education. Growing up in a single-parent family in a neighborhood with many other single-parent families on welfare triples the probability that a young black man will engage in criminal activity. 39
In vetoing the welfare reform legislation passed by the House and Senate, President Clinton has embraced the central erroneous tenets of liberal welfarism. The Clinton Administration's report on welfare, which formed the basis for the President's veto, makes clear a belief that rapid and automatic increases in welfare spending are essential to the well-being of children and that any attempts to slow the growth of future welfare spending will significantly harm children. 40 The organizers of the recent Stand for Children rally share a similar view.
The President's veto and the Stand for Children rally are both founded on the failed hypothesis that combating poverty through more generous welfare spending is crucial to children's future. This thinking is simply wrong. An expanded and more expensive welfare system will not benefit children. Instead, expansion of welfare leads to greater dependence and illegitimacy, which in turn have devastatingly negative consequences on children. Those truly concerned with the welfare of children must seek a radical transformation of the welfare system aimed not at increasing welfare spending and enrollment, but at reducing dependence and illegitimacy. That is the core of Congress's reform.
Research on Welfare and Illegitimacy
Despite repeated claims to the contrary, the overwhelming majority of scientific studies conducted in the last decade and a half show that welfare promotes illegitimacy and discourages marriage. Many show that welfare has a dramatically positive effect in increasing the level of illegitimacy in U.S. society. The following is a list of 19 studies on welfare and illegitimacy; of these, 14 have found a relationship between higher welfare benefits and increased illegitimacy.
1. Research by Mikhail Bernstam of the Hoover Institution at Stanford University shows that childbearing by young unmarried women may increase by 6 percent in response to a 10 percent increase in monthly welfare benefits; among blacks, the increase may be as high as 10 percent. Mikhail S. Bernstam, "Malthus and Evolution of the Welfare State: An Essay on the Second Invisible Hand, Parts I and II," working papers E-88-41,42, Hoover Institution, Palo Alto, Cal., 1988.
2. Research by the Director of the Congressional Budget Office, Dr. June O'Neill, has found that, holding constant a wide range of other variables such as income, parental education, and urban and neighborhood setting, a 50 percent increase in the monthly value of AFDC and food stamp benefits led to a 43 percent increase in the number of out-of-wedlock births. M. Anne Hill and June O'Neill, "Underclass Behaviors in the United States: Measurement and Analysis of Determinants," Center for the Study of Business and Government, Baruch College, February 1992.
3. A recent study of black Americans finds that higher welfare benefits lead to lower rates of marriage and higher numbers of children living in single-parent homes. In general, an increase of roughly $100 in the average monthly AFDC benefit per recipient child was found to lead to a drop of over 15 percent in births within wedlock among black women aged 20 to 24. Mark A. Fossett and K. Jill Kiecolt, "Mate Availability and Family Structure Among African Americans in U.S. Metropolitan Areas," Journal of Marriage and Family, Vol. 55 (May 1993), pp. 288-302.
4. Research by Dr. C. R. Winegarden of the University of Toledo found that half of the increases in black illegitimacy in recent decades could be attributed to the effects of welfare. C. R. Winegarden, "AFDC and Illegitimacy Ratios: A Vector-Autoregressive Model," Applied Economics 20 (1988), pp. 1589-1601.
5. Research by Shelley Lundberg and Robert D. Plotnick of the University of Washington shows that an increase of roughly $200 per month in welfare benefits per family causes the teenage illegitimate birth rate in a state to increase by 150 percent. Shelley Lundberg and Robert D. Plotnick, "Adolescent Premarital Child Bearing: Do Opportunity Costs Matter?," discussion paper no. 90-23, University of Washington, Institute for Economic Research, Seattle, 1990.
6. Research by Dr. Martha Ozawa of Washington University in St. Louis has found that an increase in AFDC benefit levels of $100 per child per month leads to roughly a 30 percent increase in out-of-wedlock births to women age 19 and under. Martha N. Ozawa, "Welfare Policies and Illegitimate Birth Rates Among Adolescents: Analysis of State-by-State Data," Social Work Research and Abstracts 14 (1989), pp. 5-11.
7. Recent research presented at a meeting at the National Academy of Sciences by Mark Rosenzweig of the University of Pennsylvania showed a reduction in AFDC payments of $130 per month could lead to a 40 percent drop in out-of-wedlock births among low income women under age 22. Mark R. Rosenzweig, "Welfare, Marital Prospects and Nonmarital Childbearing," December 1995.
8. Another recent study finds large effects of welfare on illegitimacy. A 20 percent increase in welfare benefit levels across all states would increase the probability of teen out-of-wedlock births by as much as 16 percent. (However, the authors state that these findings should be treated cautiously because they were not proven to be statistically significant.) Chong-Bum An, Robert Haveman, and Barbara Wolfe, "Teen Out-of-Wedlock Births and Welfare Receipt: the Role of Childhood Events and Economic Circumstance," The Review of Economics and Statistics, May 1993.
9. A recent study by Charles Murray finds a positive effect of welfare on illegitimacy. Charles Murray, "Welfare and the Family: The U.S. Experience," Journal of Labor Economics, Vol. 11, Pt. 2 (1993), pp. 224-262.
10. Another study by Robert Plotnick finds a positive effect of welfare on illegitimacy. Robert D. Plotnick, "Welfare and Out-of-Wedlock Childbearing: Evidence from the 1980's," Journal of Marriage and the Family, August 1990, pp. 735-46.
11. A study by Paul T. Schultz finds higher welfare benefits significantly reduce marriage rates. Paul T. Schultz, "Marital Status and Fertility in the United States," The Journal of Human Resources, Spring 1994, pp. 637-659.
12. A study by Scott South and Kim Lloyd finds a positive relationship between welfare and the percentage of births which are out-of-wedlock. Scott J. South and Kim M. Lloyd, "Marriage Markets and Non-Marital Fertility in the United States," Demography, May 1992, pp. 247-264.
13. A recent study by Phillip Robins and Paul Fronton finds that higher welfare benefits lead to more births among never-married women. Phillip K Robins and Paul Fronton, "Welfare Benefits and Family Size Decisions of Never-Married Women," Institute for Research on Poverty: Discussion Paper, DP #1022-93, September 1993.
14. A recent Rand Corporation study finds higher welfare benefits increase illegitimate births. Catherine A. Jackson and Jacob Alex Klerman, "Welfare, Abortion and Teenage Fertility," RAND research paper, August 1994.
The following five studies found no relationship between higher welfare benefits and illegitimacy. Significantly, no study has ever found that welfare has a positive effect in reducing illegitimacy and promoting marriage.
1. Gregory Acs, "The Impact of AFDC on Young Women's Childbearing Decisions," Institute for Research on Poverty, Discussion Paper # 1011-93. This study finds a small relationship between higher welfare benefits and total births to white women, but no significant relationship between welfare and illegitimate births. The study does, however, show that being raised in a single-parent home doubles the probability that a young woman will have a child out of wedlock.
2. Greg J. Duncan and Saul D. Hoffman, "Welfare Benefits Economic Opportunities and Out-of-Wedlock Births Among Black Teenage Girls," Demography 27 (1990), pp. 519-535. This study finds no effect of welfare on illegitimacy.
3. David Ellwood and Mary Jo Bane, "The Impact of AFDC on Family Structure and Living Arrangements," Harvard University, March, 1984. This study finds no effect of welfare on illegitimacy.
4. David E. Keefe, "Governor Reagan, Welfare Reform, and AFDC Fertility," Social Service Review, June 1983, pp. 235-253. This study found no link between welfare and illegitimacy.
5. Robert Moffit, "Welfare Effects on Female Headship with Area Effects," The Journal of Human Resources, Spring 1994, pp. 621-636. This study does not find that higher welfare benefits lead to higher illegitimacy.