U.S. welfare programs were transformed a little over a decade ago by the Personal Responsibility and Work Opportunity Act (PRWORA).  The reforms were fundamental and presumably life altering for those on welfare, or prone to be.  A substantial literature has developed to identify the resulting changes in welfare use, employment, well-being, and family structure.  The results largely support the conclusion that, at least in the short run, welfare reform reduced caseloads and increased employment.  Moreover, it appears that the economic well-being of single mothers was not compromised in the process.

While this outcome appears quite positive from the perspective of the government, it might not appear so to those on welfare, or prone to be.  Hours worked – or spent participating in a welfare-to-work program – generally enter one’s utility function negatively.  Moreover, well-being may be further reduced by the stress of working full-time and being a single mother.

To explore the impact of welfare reform on well-being, I compare the happiness of single mothers before and after PRWORA.  Using data from the General Social Survey and the World Value Survey, I find that single mothers’ happiness increased during the period.

To demonstrate that the observed increase in happiness was likely the result of policy changes, I use a Difference in Difference test.  Specifically, I compare the happiness of single mothers with low levels of education to the happiness of three comparison groups before and after PWRORA.  Each comparison group is similar to the single mothers in many respects but unlikely to be affected by PWRORA (for example, childless single women with low levels of education).

The results indicate that welfare reform increased the happiness of those most likely to be affected by it (single mothers with low levels of education).  The percent of single mothers who reported being ‘not too happy’ decreased significantly and the percent who reported being ‘very happy’ increased marginally.  

Alternate explanations for the observed increase happiness among single mothers, such as robust economic growth and the expansion of the Earned Income Tax Credit (EITC) between 1991 and 1996, are considered.