This book provides new estimates of the private costs and public effects of childhood disabilities among welfare recipients. Based on over 2,000 interviews conducted between 1992-96 with household heads in 3 California counties, the estimates cover direct expenditures by families and indirect costs from employment reductions. The study finds that poor parents with disabled children often face tradeoffs between meeting the special needs of their children or meeting the basic needs of their families, and between working or caring for their children. After examining participation rates in public assistance programs, the book estimates the likelihood that families with disabled children will exit these programs to independence. Concluding that public assistance may be an essential part of an income-packaging strategy for these families, the book maintains that government can move these families toward independence by providing employment-related support services and by adopting welfare eligibility rules that permit families to package earnings with continued SSI, welfare, Food Stamp, and health insurance assistance. The eight chapters are: (1) "Introduction"; (2) "Poor Families with Expensive Children"; (3) "Measuring Disabilities and Costs"; (4) "Data and Methods"; (5) "The Private Costs of Care" (6) "The Public Costs of Care"; (7) "Public Programs and Private Well-Being"; and (8) "Conclusions and Policy Implications." Four appendixes contain data on: maternal employment estimation, event history analysis of welfare transitions, hardship estimation, and disability measures. (Contains 85 bibliographic references.) (SM)