Fragile families in the American welfare state
Introduction
In 1960, only 5% of all births were to unwed parents, whereas today, the proportion is over 40% (Child Trends, 2012). “Fragile families”, or unwed parents, are fragile both because the parents have low levels of human capital and because the bonds between the parents are weak (Mincy, 1994, Mincy and Pouncy, 1997). Fragile families are of increasing importance and policy interest because their prevalence has grown so dramatically. The Fragile Families and Child Well-being Study was funded to fill gaps in knowledge about: a) the capabilities and circumstances of unwed parents, especially fathers; b) the nature of parental relationships; c) the experiences and achievements of the children, and d) the role of welfare state benefits in the lives of fragile families. A large literature examines the first three aims and a few papers investigate the roles of particular welfare state programs, such as TANF, food stamps, and child care. This is the first paper to address the role of welfare state transfers taken as a whole in the economic lives of fragile families.
In all rich nations, including the United States, welfare state benefits—from free public education, child care, public housing and vouchers, tax subsidies for home ownership, publicly financed and publicly subsidized health insurance, survivors insurance, earned income tax credits, and public relief such as Temporary Assistance to Needy Families in the US—play an important role in the lives of all families with children, but an especially large and important role in those of the poorest quintile (Garfinkel, Rainwater, & Smeeding, 2010). We build on Garfinkel, Rainwater, and Smeeding (2006), Garfinkel et al. (2010), which extends and amends the comparative welfare state literature by including education and other in-kind benefits, tax benefits and tax subsidized employer health insurance benefits, and all taxes required to finance the benefits. This paper extends their work by describing the role of welfare state benefits for different family structures. We use the Fragile Families and Child Well-Being Study, which is particularly well suited to identifying different family structures—married, cohabiting, and single parent families—and to tracing the effects of changes in family type over time. We answer for the first time, the following questions: How do welfare state transfers differ by family type? How big a role do welfare state transfers play in the economic lives of different types of families with children? How big is the gain in full income to marriage among fragile families as compared to the loss from divorce? Do welfare state transfers cushion the effects of changes in family structure on full income? To what extent do welfare state transfers and the taxes required to finance them reduce inequality among family types?
The next three sections, respectively, summarize previous literature; describe the data and methods; and present answers to these questions. The paper concludes with a brief summary, discussion of limitations, suggestions for future research, and implications for policy.
Section snippets
Background and literature review
Many welfare state scholars have used the concept of “income packaging” to describe how families combine government income transfers with market income (Mavtre et al., 2002, Rainwater and Smeeding, 1997, Rein and Stapf-Finé, 2001). In all rich nations, social insurance retirement benefits play a major role in the total income package of the aged. While no single transfer plays so dominant a role in the income package of families with children, taken together, a diverse set of cash transfers,
Data
The Fragile Families and Child Wellbeing Study (FFS) follows a cohort of parents and their newborn children in 20 large U.S. cities (in 15 states). It is representative of births in each of the cities and of births in US cities with populations of at least 200,000. The study randomly sampled births in 75 hospitals in the 20 cities between 1998 and 2000. Unmarried parents were over-sampled: Approximately three-quarters of the interviewed mothers were unmarried. Face-to-face interviews were
Results
This section begins by documenting the vulnerability and fragility of fragile families. The next subsection describes receipt and dollar values of welfare state transfers for fragile families with children as compared to married families with children. Then we describe the role of welfare state transfers in the economic lives of both family types. Finally we present estimates of the extent to which welfare state transfers and the taxes required to finance them narrow the gap between these
Discussion
This study contributes to the literatures on income packaging, marriage penalties, inequality, and welfare states by including the value of in kind transfers and taxes in the full income package and by estimating the full incomes for different family types. Most welfare state transfers to families with children are paid in kind or are services rather than cash transfers. Though in kind transfers and services may be worth less (or more) than their government cost to recipients, they are worth
Policy implications
The policy implications of this diverse set of findings are not obvious. As Garfinkel and McLanahan (1986), social policies for single mothers are confronted by a dilemma of whether to give greater priority to reducing economic insecurity and the poverty of mother only families or to reducing the number of such families and their dependence on government. Thus policy implications are rarely obvious and depend on both values and scientific facts. If we add one fact and a related value judgment
Acknowledgments
The Fragile Families and Child Wellbeing Study is funded by National Institute of Child Health and Human Development (NICHD) Grants R01HD36916, R01HD39135, and R01HD40421 as well as a consortium of private foundations and other government agencies. The content is solely the responsibility of the authors and does not necessarily represent the official views of the Eunice Kennedy Shriver National Institute of Child Health & Human Development or the National Institutes of Health. The authors are
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