Effects of Welfare Reform on Women's Illicit Drug Use

Presenter: Dhaval Dave, Bentley College and National Bureau of Economic Research

Abstract

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, often referred to as welfare reform, ended entitlement to welfare benefits under Aid to Families with Dependent Children (AFDC) and replaced AFDC with Temporary Assistance for Needy Families (TANF) block grants to states. The broad goal of PRWORA was to reduce dependence on government benefits by promoting work, encouraging marriage, and reducing non-marital childbearing. Among the features of TANF and many pre-PRWORA state waiver programs, which together constitute “welfare reform,” were time limits on the receipt of welfare benefits, work requirements as a condition of receiving welfare, and sanctions for non-compliance with program rules. PRWORA also strengthened child support enforcement and made it easier for married and cohabiting couples to qualify for welfare benefits. The PRWORA legislation granted considerable discretion to states in establishing welfare eligibility and program rules. As a result, there is substantial state policy variation within the broad national regime of time-limited cash assistance for which work is required.

Another feature of the PRWORA legislation was to end eligibility for welfare if a client or potential client is convicted of a drug felony. This provision creates a strong disincentive to using illicit drugs for women who are at risk of relying on welfare. In this paper, we use 1992-2002 data from the National Household Survey on Drug Abuse to investigates whether this feature and other incentives built into welfare reform have affected women's illicit drug use. Specifically, we conduct difference-in-difference analyses to estimate the extent to which welfare reform affected illicit drug use among unmarried mothers with low levels of education (the target group) compared to several relevant comparisonl groups.