Saturday, 15 January 2005 - 12:00 PM

This presentation is part of: Poster Session II

Family Structure, Formal Income Assistance, and Poverty Reduction among Families Headed by Relatives Caring for Children

Purpose: Given the dramatic changes in public welfare systems since the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), researchers have paid considerable attention to the impact of policy changes on parent-maintained – especially single-parent – households; however, little is known about the economic well-being of households headed by relatives caring for children. Knowledge about their use of formal income assistance and the extent to which formal income assistance alleviates poverty among kin caregivers is limited.

Methods: Using cross-sectional survey data from the National Survey of America’s Families (NSAF), the analysis focuses on approximately 1,440 families headed by grandparents and 720 families headed by other relatives. This study compares the economic well-being (assessed by poverty status and welfare dependency) between families headed by grandparents and other relatives (e.g., aunts or uncles). This study also classifies four types of families, including families headed by 1) single relative without parent, 2) married couple relative without parent, 3) single relative, at least one parent, and 4) married couple relative, at least one parent in order to investigate how family structure influences the economic well-being of these families. Formal income assistance is defined as the receipt of cash welfare benefits, Food Stamps, SSI, and foster care payments.

Results: Preliminary analysis shows similar results between families headed by grandparents and other relatives. The formal income transfer was considerably effective in reducing severe poverty (i.e., below 50 percent of the Federal Poverty Line, FPL) by the decrease (i.e., from 34 percent to 18 percent) in the percentage of extremely poor group among all grandparent-headed families. However, the transfer appeared to be less effective in moving these low-income families up to the level of non-poor (i.e., above 200 percent of the FPL).

Approximately one-fifth of single grandparents’ families were found to be experiencing extreme poverty after the transfer. The formal income support brought 15 percent of the pre-transfer poor families out of poverty and decreased the poverty gap by almost 40 percent among all relative caregivers’ families. The percent of the pre-transfer poor families brought out of poverty with the income support varied by family structure from 8 percent of families headed by single grandparents with at least one parent present to 18 percent of families headed by married grandparents with no parent present. A finding that merits special attention is that over more than half of the single grandparent caregivers’ skipped- or three-generation families remain living in poverty even after the transfer.

Implications: Given the higher poverty rates especially among families headed by single relative caregivers even after the transfer of income assistance and the potentially detrimental effects of poverty on the well-being of their families, policy makers need to reformulate economic policies that currently place grandparents at a disadvantage.

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