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Journal Issue: Children and Divorce Volume 4 Number 1 Spring/Summer 1994

Financial Impact of Divorce on Children and Their Families
Jay D. Teachman Kathleen M. Paasch

Marital Disruption and Public Assistance

Given the meager economic resources possessed by women and children in disrupted families compared with married-couple families, it is natural to ask about their participation in public assistance programs. Table 6 shows results from the 1984 SIPP with respect to receipt of Aid to Families with Dependent Children (AFDC) and food stamps, the two largest public assistance programs.26 Rates of participation and average amounts received are again shown for the panel immediately prior to marital disruption and for the four panels immediately following dissolution. Values are shown for all children and for children whose mothers did not remarry or reconcile.

About 9% of children who experienced marital disruption lived in families receiving public assistance prior to father absence. These figures increased to about 27% for food stamps and 18% for AFDC immediately following marital disruption. Generally, the proportion of children in disrupted families participating in public assistance programs grew slightly over time, probably because more families learned about their eligibility, were processed through the system, and overcame initial misgivings that they may have had about the stigma of receiving welfare. Some of the increase in participation is also due to the fact that mothers leave the labor force because of low wages or because fathers fail to make child support payments. The amounts received for parent(s) and children both range from about $240 to $300 per month for AFDC to $180 to $195 per month for food stamps.

Prior to divorce, AFDC and food stamps constituted about 18% of average family income. Following divorce, these public assistance programs made up about 25% to 30% of average family income (slightly more for children whose mothers did not remarry or reconcile). As one might expect, mothers and children who lived in higher-income families prior to divorce were less likely to receive public assistance following marital disruption. As noted above, the families most likely to fall below the poverty line are those that were relatively less well-off prior to divorce. Using data from the PSID, Weiss reported that, in the first year following a marital disruption, mothers with predisruption incomes that put them in the bottom third of the income distribution were nearly 18 times more likely to receive AFDC payments or food stamps than were mothers with predisruption incomes that put them in the top third of the income distribution.

The overall impact of public assistance on the economic well-being of disrupted families is substantial. If it were not for government cash transfers such as AFDC, the percentage of all female-headed families in poverty (including never-married mothers) would rise from approximately 50 to 57.27 By race, the percentage of poor white, female-headed families would rise from 42 to more than 49, while for blacks it would rise from 63 to 69.

The effect of government programs on poor female-headed families can be further realized by adding the estimated value of noncash transfers, such as food stamps, Medicaid, and housing subsidies, to recipients' income. Such noncash transfers are not included when calculating official measures of poverty. Using the Census Bureau's income definition 14—which adds to money income and cash transfers net of income taxes, earned income tax credits and the estimated cash value of Medicare, Medicaid, and other transfers noncash—the percentage of all female-headed families living in poverty declines to about 38.28 Under this definition, only 33% of white female-headed families live in poverty, while the percentage of black female-headed families declines to 47.27

Although both cash and noncash government transfers serve to lessen poverty, their main intent is assistance in the short term, not long-range support for raising children. Moreover, this assistance is aimed at lessening the impact of poverty, not at eliminating it. This fact is reflected in the large percentage of families headed by women that remain in poverty after noncash public transfers are taken into account.

The societal assumption is that financial, as well as social, responsibility for children should rest with parents. Thus, we turn our attention to child support as a means to better the economic well-being of divorced mothers and their children. As we shall see, many mother-headed divorced families receive little or no support from nonresident fathers. Child support is important not only because of its impact on these families but also because of its potential impact on welfare costs. Based on data from Wisconsin, Garfinkel estimates that a child support program which would assure collection would pay for itself.29