Welfare reform and family expenditures: how are single mothers adapting to the new welfare and work regime?

This work studies the association between welfare reform, broadly defined to include an array of social policy changes affecting low‐income families in the 1990s, and expenditure patterns of poor single‐mother families. The findings suggest that welfare reform is not associated with any statistically significant change in total expenditures in families headed by low‐educated single mothers. However, patterns of expenditure changed. The reform policy is associated with an increase in spending on transportation and food away from home, as well as on adult clothing and footwear. In contrast, it is not related to changes in expenditures on child care or learning and enrichment activities. The pattern of results suggests that welfare reform has shifted family expenditures toward items that facilitate work outside the home but, at least so far, does not allow low‐income families to catch up with more advantaged families in expenditures on learning and enrichment.