EVERYONE INVOLVED IN "WELFARE REFORM" COULD usefully read "What Money Can't Buy" (Harvard University Press), a study by economist Susan Mayer of the University of Chicago. Its message is somber: as a society, we are fairly helpless to correct the worst problems of child poverty. This is not a new insight, but by confirming it, Mayer discredits much of the welfare debate's overwrought rhetoric. "Welfare reform" may raise or lower poverty a bit (we can't say which), but neither its supposed virtues nor its alleged vices are powerful enough to alter the status quo dramatically.
What's impressive about Mayer's study is that it contradicts both her politics and her history. She's a registered Democrat, a self-described "hard-nosed" liberal. She does not write explicitly about welfare but instead asks a basic question: how important is money in enabling families to help their children escape poverty? Having once been a single mother without much money, she believed that money was critical. "It's terrible to be a parent," she says, "and not be able to buy things that your kids want." She recalls having to borrow to pay a doctor's bill. Money must matter. Well, it doesn't--at least, not much.
Mayer reviewed studies and tried to match parents' incomes with children's outcomes. Good outcomes were high test scores, having a job (or being in school) at the age of 24 and earning high wages. Bad outcomes included dropping out of high school and becoming an unwed mother. Of course, children of middle-class parents do better than children of poorer parents. Mayer tried to distinguish between the pure income effects and other influences. Once she does, income's impact drops sharply. (Warning to potential readers: a lot of the book is technical.) She writes:
"The parental characteristics that employers value and are willing to pay for, such as skills, diligence, honesty, good health, and reliability, also improve children's life chances, independent of their effect on parents' incomes. Children of parents with these attributes do well even if their parents do not have much income." This demolishes much of the welfare debate's rhetorical boilerplate, liberal and conservative.
As Mayer notes, it "flies in the face of the common liberal claim that "the poor are just like everyone else except that they have less money'." Indeed, the material well-being of poor children has generally improved, report Mayer and sociologist Christopher Jencks of Harvard in another study. In 1970, about 26 percent of the poorest fifth of children hadn't visited a doctor in the past year; by 1989, the figure was only 14 percent. In 1973, about 71 percent of these children lived in homes without air conditioning; by 1991, only 45 percent did. Unfortunately, these material improvements didn't translate into better social conditions. Crime rose; so did out-of-wedlock birthrates.
But Mayer's study also shakes the reassuring conservative assumption that, if pushed, the poor can become self-sufficient through work. Precisely because many long-term welfare recipients aren't as competent or disciplined as middle-class parents, they may not find and keep jobs, let alone well-paying ones. The thrust of Mayer's grim analysis is to support the existence of a permanent "culture of poverty," an argument first advanced in the modern American context by political scientist Edward Banfield in a 1970 book.
Banfield split the poor into two groups. Some simply lacked money. These included many disabled and unemployed people, and some single mothers, who had been widowed, divorced or abandoned. These people had middle-class values and could benefit from government income support. They could usually recover from a setback (job loss, divorce). Then there was the true "lower class," who would "live in squalor... even if their incomes were doubled," Banfield wrote, because they had a "radically present-oriented" outlook that "attaches no value to work, sacrifice, self-improvement, or service to family, friends or community."
The Banfield theory ignited outrage, because it meant that, beyond some point, the effort to end poverty would fail. In the prevailing climate--all problems were then deemed solvable--this was heresy. But it has stood the test of time and taps into popular ambivalence about social welfare. For 200 years Americans "have vacillated between trying to improve the material well-being of poor children and... the moral character of their parents," says Mayer. Early in the 19th century, localities provided the poor with "outdoor relief" (a handout of money, food or goods). Later the poor were shunted into almshouses, intended to promote work, temperance and character.
The present "welfare reform" fits this tradition. It is not as harsh as critics charge. (The one exception is the cutoff in benefits to legal immigrants; but this involves immigration, another matter.) For example, it does not impose an absolute five-year lifetime welfare limit (a fifth of a state's caseload can exceed five years). It correctly presumes that what people do for themselves matters more than what government does for them. By allowing states to experiment with mixes of benefits and work requirements, we may discover which policies succeed.
But reform could easily fail. The real test is not reduced welfare caseloads. These have already dropped 21 percent since early 1994, mainly as the result of a strong economy. The real tests are less teenage pregnancy, more stable marriages and better homes for children. It's a tall order--perhaps an impossible one --for government to re-engineer family life and human nature. And, of course, not all poor families are on welfare.
The dilemma is to maintain an adequate safety net without being so generous as to create more dependency. Mayer doubts that expanding the safety net would do much good. It now meets most families' basic needs--one reason, she suspects, why extra income doesn't much improve children's prospects. But she fears that scaling assistance back sharply might do harm. Still, she has no pat solutions. After finishing her study, she felt depressed by the realization that ending poverty "may be beyond the capacity of even a rich nation."
