Two nationally known poverty scholars predict that state and federal welfare reforms will increase the dispersion in the economic circumstances of children in low-income families. The deepening poverty of the subset of children whose families’ fortunes decline could profoundly and negatively affect their early development and later-life achievement.

Greg Duncan (IPR-Education), deputy director of the Joint Center for Poverty Research, and Jeanne Brooks-Gunn of Columbia University, reach these conclusions in a recently published paper, “Welfare’s New Rules” in Issues in Science and Technology (Winter 1997-98).

Their research suggests that close to half the current welfare families, nearly two-million families and four-million children, will eventually hit the five-year time limit mandated by the welfare reform of 1996. This is more than double the number that states can exempt for hardship under the new Temporary Assistance to Needy Families (TANF) laws. They anticipate that as many as half of these families will see their incomes fall well below the poverty line.

Sanctions and categorical restrictions, such as denying cash assistance to children born to underage unmarried women are likely to hit hardest. The researchers have previously demonstrated how family economic conditions in early child-hood can have large and rather selective effects on children’s development, particularly in shaping ability and achievement.

Duncan and Brooks-Gunn have found, for example, that for children in low-income families a $10,000 increase in income averaged over the first five years of life is associated with nearly a three-fold increase in the odds of that child’s finishing high school. This effect is much larger than for income increments occurring later in childhood.

To forestall harmful effects on child development, the authors suggest states act to prevent situations of deep poverty for young children by exempting their parents from time limits, sanctions, and categorical restrictions, at least until the child’s second or third birthday. They also recommend a more general reconsideration of policies such as child allow-ances and refundable tax credits geared to children’s ages, with the bulk of benefits for families with young children.

For families least able to take advantage of welfare reform and the booming economy, some combination of cost-effective job training and other skill-building programs would help prepare some long-term recipients for the work force. States might also expand their existing service delivery programs, such as nutrition education and supplements, medical care, early childhood education, and housing.