Ten years later: Self‐sufficiency of welfare mothers before the Great Recession (Vaughan et al., 2021)

Study Profile What's in a study profile?
Causal Evidence Rating:
Low Causal Evidence
Study Type:
Causal Impact Analysis
Outcome Findings:
Earnings and wages: Low-No impacts
Citation
Vaughan, D. R., Haley, B. A., & Dajani, A. N. (2021). Ten years later: Self‐sufficiency of welfare mothers before the Great Recession. Poverty & Public Policy, 13, 184-223. https://doi.org/10.1002/pop4.308

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Absence of conflict of interest.

Highlights

  • The study's objective was to examine the impact of the Earned Income Tax Credit (EITC) on the economic self-sufficiency of mothers receiving welfare benefits through the TANF program.
  • The study used an interrupted time series design with administrative data. The authors compared the outcomes of participants before and after they participated in the intervention.
  • The study did not find a statistically significant relationship between the EITC and improved earnings for mothers receiving welfare benefits through the TANF program.
  • This study receives a low evidence rating. This means we are not confident that any estimated effects would be attributable to the Earned Income Tax Credit (EITC); other factors are likely to have contributed. However, the study did not find any statistically significant effects.

Intervention Examined

Earned Income Tax Credit (EITC)

Features of the Intervention

In 1996, the Personal Responsibility and Work Opportunities Reconciliation Act (PWORA) introduced the Temporary Assistance for Needy Families (TANF) program, replacing the previous welfare system. TANF aims to assist individuals in transitioning off welfare and securing employment. However, for those newly receiving TANF benefits in 1996, the Earned Income Tax Credit (EITC) may have impacted their journey toward economic self-sufficiency. EITC is a federal tax credit designed to support low-income workers by reducing their tax burden and increasing their income. Eligibility for the EITC requires individuals to have earned income from employment. The amount of tax credit varies based on income levels and family structure, decreasing as a family's income surpasses the federal poverty line.

Features of the Study

The study used an interrupted time series design to analyze the impact of the EITC on economic self-sufficiency among mothers receiving TANF benefits. The study sample included 1,000 mothers who were TANF recipients in 1996. The pre-intervention period was set in 1996 and the post-intervention period spanned from 1997 to 2007. Notably, the study did not include a comparison group, as all participants received the EITC. Data sources included the 1996 panel of the Survey of Income and Program Participation (SIPP) and records from the Social Security Administration and the Internal Revenue Service for the years 1996 to 2007. The authors used statistical models to evaluate whether TANF recipients achieved economic self-sufficiency, defined as earning at least twice the federal poverty line, specifically set at 175% of that line, during the designated timeframe.

Findings

Earnings and wages

  • The study did not find a significant relationship between the EITC and improved earnings for mothers receiving welfare benefits through the TANF program.

Considerations for Interpreting the Findings

The authors compared the outcomes of participants measured before and after they received welfare benefits from the TANF program in 1996. For these types of designs, the authors must observe outcomes for multiple periods before the introduction of the TANF program to rule out the possibility that participants had increasing or decreasing trends in the outcomes examined before enrollment in the TANF program. Without knowing the trends before program enrollment, we cannot rule this out.

The study lacks specific data on the economic self-sufficiency estimates related to the EITC, making it impossible to report precise findings. The reported results were statistically significant at the 10 percent level, but without p-values, it is unclear if they meet the 5 percent significance threshold required by CLEAR. Consequently, the findings are considered not statistically significant. Additionally, the authors did not consider when the TANF program was introduced, which may have coincided with other events, potentially obscuring the true impact of the EITC on economic self-sufficiency for mothers on welfare.

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the authors did not account for trends in outcomes before the intervention. This means we are not confident that the estimated effects would be attributable to the Earned Income Tax Credit (EITC); other factors would have likely contributed. However, the study did not find any statistically significant effects.

Reviewed by CLEAR: June 2026

Topic Area

Low-Income Adults

Research Guidelines

Review Protocol: Living Systematic Annual Search and Review Protocol

Review Guidelines: Causal Evidence Guidelines