Panel Paper: The Role of Welfare State Benefits in Closing the Income Gap Among Different Types of Families

Thursday, November 2, 2017
Burnham (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Irwin Garfinkel1, Sara McLanahan2, Laurel Sariscsany1 and Laura Vargas1, (1)Columbia University, (2)Princeton University


Declines in marriage and increases in non-marital childbearing have dramatically altered the types of families in which US children are growing up, with important implications for children’s economic wellbeing. According to recent estimates, about 60 percent of US children today are born to married parents, 20 percent are born to cohabiting parents and 20 percent are born to single mothers. By age five, 20 percent of children born to married parents have experienced a parental divorce, 40 percent of those born to cohabiting parents have experienced parents’ separation, and 8% of all children are living with a stepparent. Variation in the types of families in which children are born along with high levels of family instability during early childhood raise questions about the sources of economic support in these families and whether support is sufficient.

This paper uses data from the Fragile Families and Child Wellbeing study (FFS) to describe the role of welfare state benefits in the economic lives of children between birth to age 15. The Fragile Families and Child Wellbeing Study is a population-based sample of children born in 20 cities between 1998 and 2000 with a large oversample of births to unmarried parents. When weighted, the data are nationally representative of births in large US cites (cities with populations of 200,000 or more).

 Our analysis builds on previous research by Garfinkel & Zilanawala (2015), that used FFS data to examine welfare state benefits of families with children and to compare children born to married parents with children born to unmarried parents (termed “fragile families”). Our study extends G&Z in two ways; first, whereas G&Z examined welfare state benefits for children from birth to age 5, we examine benefits from birth to age 15. Second, whereas G&Z findings can be generalized to children born in 20 large US cities, our results can be generalized to all children born in large US cities.

The US is somewhat unique in that many welfare state benefits are provided through the tax system and employers. A household’s total income package is determined by the sum of 1) market income, 2) welfare state cash and in-kind transfers, and 3) tax credits. Tax liabilities are then subtracted from this sum. The new analyses will describe the total public benefits and the total income package, and their compositions, for children born to married-parent families and fragile families. Fixed effect models will be used to measure the effect of post birth changes in residential and marital status on welfare state transfers and total household incomes.

The previous research examining welfare state benefits through age 5 found that the absolute value of benefits received by the three family types was nearly equal, whereas the relative value was very different. Welfare state transfers and the taxes required to finance them reduced family status differences. This paper examines the extent to which these patterns and magnitudes persist or change as children grow older and enter adolescence.

Full Paper: