May 1, 1997
Vol. 16, No. 16

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    Welfare reform could break cycle for some families

    Study shows parents' work habits affect successive generation If welfare reform is successful in moving people from welfare to work, it is likely to reduce welfare dependency for the recipients' children as they gain a stronger work ethic from seeing their parents employed, a new University study shows.

    The impact of welfare reform could be greatest among the small group of families for whom welfare participation occurs in successive generations, said Casey Mulligan, Assistant Professor in Economics and author of the study "Work Ethic and Family Background," which was published by the Employment Policies Institute in Washington, D.C. The effect may be negligible, however, for the vast majority of families for whom one or both generations do not participate in welfare, Mulligan said.

    "My results suggest that the work decisions of adult children are related to the income of their childhood households and the work ethic they pick up from their parents," Mulligan said. "An increase in work or decrease in welfare program participation by adults may also increase the social value of work and decrease the social acceptability of welfare participation.

    "Part of a person's willingness to work is moral or psychological," Mulligan said. "The cliche of the Protestant work ethic is an example of the moral or psychological attitude that, regardless of one's wage or income, it is good for a person to work, especially for an adult male," he said.

    Like the habits of work, the habits of collecting welfare and food stamps are sometimes picked up by children and repeated as they become adults themselves, Mulligan said.

    A father's unemployment may affect a child's later employment in a number of other ways. For example, the less a father works, the more limited the family's investment may be in a child's education. A child whose father doesn't work also may be less willing to work as an adult, Mulligan said.

    Mulligan said that although many factors other than a person's willingness to work ultimately determine work experience and welfare-program participation, his study simultaneously analyzes the determination of wages and work experience to show that a person's willingness to work may be one of the more important of those factors.

    For his study, Mulligan used data from the Panel Study of Income Dynamics, begun in 1968, which included 1,872 low-income families, plus 2,930 families representing the entire work force. The participants were interviewed annually until 1989.

    Using the data, he measured the economic activities of parents from 1967 to 1971 and then compared their experiences with the economic status of their children as adults during the period of 1984 to 1988.

    His research illustrates how income and welfare dependency of parents influence the economic lives of their children. His findings show:

    _ In families that experienced unemployment in successive generations, unemployment of a father had a significant influence on his sons' future employment. For instance, if a father was unemployed for a year, his sons later experienced unemployment for several months, typically between five and nine months.

    _ More hours of work by parents also increased the amount children worked as adults, particularly sons. Each hour of overtime worked by a father was associated with 12 minutes of overtime worked by sons.

    _ Among families in which two generations participated in welfare, each year of welfare participation by parents correlated to between 120 and 274 days of welfare dependence for daughters.

    _ Among families in which two generations collected food stamps, each year of parental dependence on food stamps was associated with between 139 and 223 days of dependence by daughters and between 113 days and 197 days for sons.

    Mulligan's study of work decisions is part of a larger study of the economic links between parents and children, the results of which will be published in the forthcoming book Parental Priorities and Economic Equality.

    -- William Harms