Intergenerational Effects of Welfare Reform on Educational Attainment

Abstract

This paper estimates the impact of the fundamental welfare reforms of the 1990s on the educational attainment of children in low-income families. Using administrative records and individual survey data spanning the early 1990s to the mid 2000s, we find large positive effects of welfare reform: income gaps in school enrollment and drop-out rates narrow by more than 20 percent. Although low-income children experience significant and growing relative gains following welfare reform, there are no relative gains before welfare reform. These findings are robust to changing the definitions of the income groups and to controlling for contemporaneous economic and policy changes.

Keywords: Welfare Reform, Educational Attainment, Children in Low-Income Households

JEL Classification: H5, I2, I3