Effects of Welfare Reform on Education Acquisition of Adult Women

Dhaval M. Dave, Hope Corman, Nancy E. Reichman

Education beyond traditional ages for schooling is an important source of human capital acquisition among adult women. Welfare reform, which began in the early 1990s and culminated in the passage of the Personal Responsibility and Work Opportunity Reconciliation Act in 1996, promoted work rather than education acquisition for this group. Exploiting variation in welfare reform across states and over time and using relevant comparison groups, we undertake a comprehensive study of the effects of welfare reform on adult women's education acquisition. We first estimate effects of welfare reform on high school drop-out of teenage girls, both to improve upon past research on this issue and to explore compositional changes that may be relevant for our primary analyses of the effects of welfare reform on education acquisition among adult women. We find that welfare reform significantly reduced the probability that teens from disadvantaged families dropped out of high school, by about 15%. We then estimate the effects of welfare reform on adult women's school enrollment and conduct numerous specification checks, investigate compositional selection and policy endogeneity, explore lagged effects, stratify by TANF work incentives and education policies, consider alternative comparison groups, and explore the mediating role of work. We find robust and convincing evidence that welfare reform significantly decreased the probability of college enrollment among adult women at risk of welfare receipt, by at least 20%. It also appears to have decreased the probability of high school enrollment among this group, on the same order of magnitude. Future research is needed to determine the extent to which this behavioral change translates to future economic outcomes.