A summary of recent research shows that more than 11.5 million children lived in poverty in 2001 and likely will experience long-term negative effects of poverty, such as dropping out of high school, compromised physical growth and cognitive development, and reduced physical and psychological well-being as an adult. Improving the home life of children begins with expanding the opportunities and skills of the parents. The research shows that job training and education are fundamental to reducing poverty. The research shows that, while work is often the means by which women exit welfare, education helps them attain self-sufficiency. Attacking poverty by lifting the family's income level through education results in positive effects in parenting and children's school achievement and literacy. Recommendations for welfare policy improvement include the following: (1) remove the current arbitrary 12-month limit for vocational training; (2) eliminate the 30 percent cap on the number of recipients who can count education and training activities as work; and (3) broaden the definition of work to include elementary and secondary education, as well as literacy education, high school equivalency programs, and higher education. (Contains 31 references.) (KC)