Economic Patterns of Single Mothers Following Their Poverty Exits

1
Economic Patterns of Single Mothers Following
Their Poverty Exits

• Quinn Moore
• Anu Rangarajan
• Peter Schochet
• ACF/OPRE Welfare Reform Conference
• June 4-6, 2007

2
Research Questions

• How many single mothers exit poverty and who are
  they?
  
• Why do they exit and how long do they stay out of
  poverty?
  
• What are their income, employment, and welfare
  experiences over two years?
  
• What factors are associated with their economic
  success?

3
2001 SIPP Data

• 2001 SIPP
• Monthly longitudinal data (2001-2003)
• Includes 615 single mothers who exited poverty
  during the first panel year (2001)
  
• Follows their monthly experiences over a
  two-year period following poverty exit

4
In 2001, More Than Half of Single Mothers Were
Ever Poor 30 Percent Exited Poverty
Poor and Stayed Poor
Never in Poverty
Poor but Then Left Poverty
Source 2001 SIPP Data.
5
Why Do Single Mothers Exit Poverty and How Long
Do Their Spells Last?
6
Earnings Increases Are Most Common Non-poverty
Spells Are Short

• 75 percent of single mothers exit poverty due to
  increase in earnings
  
• Household composition changes not very common
• Median duration of non-poverty spells is about 8
  months
  
• Duration does not vary by type of exit
• Duration of the next poverty spell for those who
  return to poverty is short (about 5 months)

7
Single Mothers Who Exit Poverty Can Be
Classified into Three Groups
Never Reentered Poverty
Cycled in and out of Poverty
Reentered Poverty and Stayed
Source 2001 SIPP Data.
8
What Are the Characteristics of These Three
Groups of Women at the Time of Their Poverty
Exits?
9
Poverty Leavers Face the Least Barriers While
the Returners Face the Most
Percentage with Characteristic
Never Reentered Poverty
Cycled in and out of Poverty
Reentered Poverty And Stayed Poor
Characteristic
Non-white 53 48 53 Older than 30 70 65 50 Ever
married 62 55 44 High school credential 92 77
59 Health problem 12 8 27 Received TANF 2 1
1 19 Employed 64 73 60
Source 2001 SIPP Data. Statistically signifi
cant at the 5 percent level relative to those who
reentered poverty and stayed poor.
10
Earnings Increases Are More Common Trigger Events
for Poverty Leavers Than for Other Groups
Source 2001 SIPP Data. Statistically signifi
cant at the 5 percent level relative to those who
reentered poverty and stayed poor.
11
Poverty Leavers Have Higher Paying Jobs When
They Exit Poverty
Dollars

Source 2001 SIPP Data. Statistically signifi
cant at the 5 percent level relative to those who
reentered poverty and stayed poor.
12
And Are More Likely to Have Jobs With Benefits
and in Professional Occupations
Percentage
Source 2001 SIPP Data. Statistically signifi
cant at the 5 percent level relative to those who
reentered poverty and stayed poor.
13
What Are the Economic Experiences of the Three
Groups During the Two Years After Their Poverty
Exits?
14
Poverty Leavers Had Much Better Outcomes During
the Follow-Up Period
Percentage
Out of Poverty for Half the Period
Income More than Twice the Poverty Threshold
for Half the Period
Source 2001 SIPP Data. Statistically signifi
cant at the 5 percent level relative to those who
reentered poverty and stayed poor.
15
Poverty Leavers Had Larger Income Gains
Never Reentered Poverty
Cycled In and Out of Poverty
Reentered Poverty and Stayed
28
27
52
30
3
6
17
22
27
4
16
68
Source 2001 SIPP data.
16
Poverty Leavers Spent More Time Employed and
Less Time Receiving Benefits
Percentage with Characteristic
Never Reentered Poverty
Poverty Cyclers
Reentered Poverty and Stayed Poor
Characteristic
of time employed 88 75 46 Received food stamp
s 8 27 55
Received TANF 1 9 19
Source 2001 SIPP Data. Statistically signifi
cant at the 5 percent level relative to those who
reentered poverty and stayed poor.
17
Poverty Leavers Earned More
Average Monthly Earnings in Dollars
Never Reentered Poverty
Cycled In and Out of Poverty
Reentered Poverty and Stayed Poor
Months Since Poverty Exit
Source 2001 SIPP Data.
18
And Spent More Time in Better Jobs
Percentage of Time Spent in Jobs With Indicated
Characteristic
Source 2001 SIPP Data. Statistically signifi
cant at the 5 percent level relative to those who
reentered poverty and stayed poor.
19
Multivariate Analyses Show That Initial Job
Characteristics Are Important

• Those with health limitations more than twice as
  likely to return to poverty and remain poor
  
• Those with HS degree more than twice as likely to
  stay out of poverty
  
• Initial job characteristics
• Those with health ins. coverage 60 percent more
  likely to stay out of poverty
  
• Those starting in high wage jobs more than 50
  percent more likely to stay out of poverty

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Summary and Conclusions
21
Single Mothers Who Exit Poverty Have Diverse
Experiences

• As a group, they experience progress over time
• Poverty Leavers (28)
• High levels of income and earnings/most
  experience income growth
  
• Poverty Cyclers (55)
• Connected to the labor market/experience some
  growth in income, but not far above the poverty
  line
  
• Poverty Returners (16)
• Small group fared poorly/some returned to public
  assistance about half remain disconnected

22
Employment and Earnings Play a Key Role in
Poverty Dynamics for These Women

• Most exit or reenter poverty because of earnings
  changes
  
• Initial job quality is strongly associated with
  economic success, even after controlling for
  numerous factors
  
• Consistent with findings from other studies
• Employment retention and advancement strategies
  can be an important issue for this group