TANF Generosity, State-Provided Maternity Leave and the Material Wellbeing of Low-Income Families with Infants

Purpose. Recent research suggests both TANF and state-provided paid maternity leave are sources of financial support for low-income mothers in the period surrounding a birth. A burgeoning line of research suggests that TANF serves as a de facto paid family leave program for low-income new mothers. A parallel line of research suggests that poor new mothers may substitute publically provided paid maternity leave policies (temporary disability insurance (TDI) and/or paid family leave (PFL) programs) for TANF, when states provide this option. Research has found that while substituting paid leave programs for cash welfare may result in cost savings for states such substitutions may also result in fewer resources for low-income, new-mother families, particularly those with unstable work histories. Prior research, however, does not investigate how TANF and/or state-provided paid leave programs impact the material wellbeing of low-income families in the period surrounding birth. To build knowledge in this area, we examine the role of state-level TANF policies (time limits, length of work exemptions for new mothers, eligibility of pregnant women, diversion programs, sanction policies and benefit levels) and paid maternity leave provisions in predicting TANF use and material hardship (difficultly paying expenses, utilities, and rent/mortgage) in the period following a birth.

Methods. Data come from the 1996-2008 panels of the Survey of Income and Program Participation (SIPP) with state-year policy variables created using the Urban Institute’s Welfare Rules Database. The sample includes mother-birth dyads in families below 200% of the FPL (N = 2,289). We estimate a series of logistics regressions to determine the association between state policy characteristics (measures of TANF generosity and an indicator for if the state had a TDI or PFL program in the year of the focal birth) and (1) the probability of TANF enrollment in the three months post-birth, and the probability of experiencing difficulty in paying: (2) rent; (3) essential expenses; and (4) utilities in the year following birth. We control for individual and household characteristics and account for policy endogeneity with state and year fixed effects.

Results. Indicators of state-level TANF generosity (higher benefit levels, eligibility of pregnant women) are significantly associated with a higher likelihood of post-birth TANF participation. More stringent TANF policies (diversion programs, time limit lower than the federal 5 year limit, and full-family sanctions) are significantly associated with lower likelihood of post-birth TANF participation. State-level TANF policies are also related to new mothers’ experiences of material hardship. Most notably, the full-family sanction is associated with significantly higher likelihood of difficulty paying rent, essential expenses and utilities in the year following a birth. Low-income new mothers with access to paid maternity leave through state TDI programs are significantly more likely to participate in TANF and less likely to report difficulty paying essential expenses or utility bills.

Conclusions.  Our results suggest that the package of state-level policies serving low-income new mothers shapes welfare use and family wellbeing during the vulnerable post-birth period. The discussion will include implications of these findings for social policy makers, administrators and researchers.