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Child Poverty and Welfare Reform: Stay the Course

Thursday February 2005


June O’Neill, Ph.D. Professor of Economics, Zicklin School of Business, Baruch College (CUNY) Former Director, Congressional Budget Office (1995-1999)

There is now broad agreement that welfare reform worked—as demonstrated by the large declines in both welfare rolls and child poverty since 1996. But the direct effect of the legislation is unclear because of a number of other simultaneous trends, including the longest sustained economic expansion in the nation’s history.

As Congress debates the reauthorization of the welfare reform legislation, it is important to clarify the impact of reform on child poverty and to understand how this reform fits into what we already know about poverty reduction.

Dr. O’Neill’s new Manhattan Institute report quantifies the impact of welfare reform and finds that it may be responsible for as much as half of the decline in child poverty among black and Hispanic households headed by single mothers—groups that had the highest rates of welfare participation and child poverty prior to reform.