Welfare reform and unemployment among young, low-skilled men

 
(ncfy.acf.hhs.gov)
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In recent years, policymakers, scholars and the media have focused on the plight of young men in the U.S. who have few skills and little education. Black and Hispanic young men in particular face tough challenges, considering they are more likely to have dropped out of high school than white men and less likely to have jobs. For the first quarter of 2016, the unemployment rate for black men aged 20 to 24 years was 16.6 percent, on average, compared to 11 percent for Hispanic men, according to the U.S. Department of Labor. The unemployment rate for all men in that age group averaged about 10 percent – double that of all men 25 years old and older.

As researchers and other stakeholders try to understand the factors that may improve or worsen the problem, some have looked to employment trends among young women. Welfare reform policies enacted in the 1990s, for example, have resulted in substantial increases in employment among low-skilled women with children. A 2002 working paper for the National Bureau of Economic Research, “Evaluating Welfare Reform in the United States,” offers a review of the economics literature on welfare reform efforts, including programs that require adults receiving certain types of public assistance to get and keep jobs.

A 2016 study published in the journal Demography examines how welfare reform initiatives have affected the employment of men – especially young men who have a high school diploma or less. Lincoln H. Groves, a fellow at the University of Wisconsin-Madison’s Institute for Research on Poverty, used workforce data from 1989 to 2002 to analyze trends among black and white men of different ages. For his study, titled “Welfare Reform and Labor Force Exit by Young, Low-Skilled Single Males,” Groves separated men into two groups — a group of “young” men between the ages of 16 and 29 and a group of older men, aged 30 to 49.

Groves also looked at how rising employment for single mothers with low education levels impacted employment for single women without children who also had low levels of education. Single, childless women of both races were divided into two age groups – a group of “young” women ages 16-29 and a group of women with a wider range of ages, 16-44.

The study’s key findings include:

  • As single mothers with a high school diploma or less found jobs, young, single men with the same education level left the workforce. For every 10 percentage-point increase in labor force participation among single mothers, there was a decrease of approximately 2.8 percentage points among single, young men.
  • The decline was driven by young, white males. The number of young, single, low-skilled white men in the labor force dropped by approximately 3.7 percentage points for every 10 percentage-point increase in low-skilled, single mothers getting jobs.
  • There was no apparent decline among older men of either race.
  • There is no evidence that single, childless women of either age group or race left the workforce as a result of welfare reforms.

This study suggests that welfare reform policies that were intended to increase the number of low-skilled, single mothers in the workforce inadvertently led to a decline of young, low-skilled, single men in the workforce. Groves notes that less-educated men who do not attend school or have jobs are more likely to commit crimes and less likely to form stable relationships with their partners. “These byproducts have contributed greatly to the long-term increases in incarceration rates in the United States, as well as the decline of stable, nuclear working-class families,” he states. He says the study “supports the calls by many scholars to increase work incentives to other segments of low-wage workers.”

Related research: A 2013 study in Demography, “Examining the Antecedents of U.S. Nonmarital Fatherhood,” looks at the factors that contribute to men having children outside of marriage. A 2016 working paper from the National Bureau of Economic Research, “Effects of Welfare Reform on Women’s Voting Participation,” suggests that welfare reforms in the 1990s increased the likelihood that low-income women vote.

 

Keywords: labor supply, unemployment, high school dropout, low-skill worker, GED, single mom, poverty, minimum wage

Last updated: May 6, 2016

 

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Citation: Groves, Lincoln H. “Welfare Reform and Labor Force Exit by Young, Low-Skilled Single Males,” Demography, April 2016, Vol. 53. doi: 10.1007/s13524-016-0460-3.