Welfare reform and the subjective well-being of single mothers

Although a large body of research examines the impact of welfare reform, there remains considerable uncertainty as to whether single mothers’ well-being improved in the wake of these policy changes. Using unique data from the DDB Worldwide Communications Life Style TM survey, this paper exploits a large battery of survey questions on self-reported life satisfaction and physical and mental health to study the impact of welfare reform on the subjective well-being of single mothers. The identification strategy relies on a difference-in-differences framework to estimate intent-to-treat effects for the welfare waiver and TANF periods. Results indicate that the bundle of TANF reforms had mostly positive effects on single mothers’ subjective well-being. These women experienced an increase in life satisfaction, greater optimism about the future, and more financial satisfaction. Furthermore, these improvements did not come at a cost of reducing mental and physical health. Welfare waivers, in contrast, had largely neutral effects on well-being. I provide indirect evidence that the increase in single mothers’ employment after welfare reform can plausibly explain the gains in subjective well-being. Copyright Springer-Verlag 2013