The Short-Term Effects of the COVID-19 Pandemic on the Economic Wellbeing of Single-Mother Families

Background and Purpose: When the COVID-19 pandemic began, single-mother families already experienced some of the highest poverty rates in the United States: 25% of single-mother families had incomes below the federal poverty line (FPL) compared to 5% of two-parent families. Single-mother families were particularly hard hit by the economic downturn brought on by the COVID-19 pandemic, especially those who are low-income, racial and ethnic minorities, and immigrant families. Yet, the safety net also significantly expanded in the immediate aftermath of COVID-19, including economic stimulus payments and expansions in Unemployment Insurance (UI) benefits, which may have compensated for declines in single-mothers’ earnings and child support payments. In this study, we examine the effects of the COVID-19 pandemic on single mothers’ income packages.

Methods: We use merged administrative data from several programs in Wisconsin: Temporary Assistance for Needy Families (TANF), child support, Supplemental Nutrition Assistance Program (SNAP), Social Security, and Unemployment Insurance (UI). To estimate the effects of the pandemic on single mothers’ income packages, we construct a treatment and comparison cohort. The treatment cohort includes mothers with a non-marital birth in 2018 (N=21,113); we observe their outcomes in July to December 2020, after the start of the COVID-19 pandemic. The comparison cohort includes mothers with a non-marital birth in the year prior (N=22,768), 2017, which had similar GDP growth and unemployment as 2018; we observe their outcomes in July to December 2019. Single mothers’ income sources include: formal earnings, child support receipt, UI benefits, TANF benefits, and Social Security and Supplemental Security Income benefits. We also consider near-cash benefits (i.e., SNAP) and estimate tax benefits using NBER’s TAXSIM program. Our analyses will estimate the effects of the pandemic on single mothers’ total income, income from each source, and probability of having an income below the FPL.

Results: Preliminary analyses suggest that, as expected, the COVID-19 pandemic led to a decline in single mothers’ earnings and an increase in UI benefits. Relative to the comparison cohort, single mothers’ earnings declined by approximately $300 in the third quarter (July-September) of 2020. However, UI benefits increased by approximately $600 during this period, more than compensating for earnings losses. Similarly, we find that the percentage of single mothers with any earnings declined from 61% to 57%, but the percentage with any UI receipt increased from 1.4% to 12%. Results are similar if we restrict the sample to mothers with a child support order, who we can be more certain are living apart from the child’s father. Subsequent analyses will consider all income sources described above; estimate models that consider within-person growth in income between the two cohorts; and examine subgroup differences by mothers’ race/ethnicity and immigration status.

Implications: Our study will show how well safety net expansions mitigated earnings losses brought on by the COVID-19 pandemic and shaped the income packages and economic wellbeing of single mothers in the short term. These findings will inform policymakers on the effectiveness of specific safety net programs for supporting single-mother families in future economic downturns.