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Abstract:
I estimate a structural model of sole-parent families to analyse the impact of TANF. Its benefits fail to reach the poorest mothers, who typically prefer not to meet the 30 hr/wk work requirement. Using the model to measure the intra-household allocation of resources, I find that poverty rates among children of sole mothers have risen by four percentage points since 1996. I compare TANF to alternative policies, such as free childcare, which promote labour supply by increasing the returns to work. Such policies are more than twice as effective at targeting household resources to children, per dollar spent.
