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Title: The Impact of AFDC on Birth Decisions and Program Participation
Resulting in 1 citation.
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Powers, Elizabeth T. |
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The Impact of AFDC on Birth Decisions and Program Participation Working Paper No. 9408, Federal Reserve Bank Cleveland, Ohio, June 1994. Also: http://www.clevelandfed.org/research/workpaper/1994/wp9408.pdf Cohort(s): Mature Women Publisher: Federal Reserve Bank of Cleveland Keyword(s): Age at First Birth; Aid for Families with Dependent Children (AFDC); Birth Rate; Family Characteristics; Marital Status; Modeling, Logit; Modeling, Probit; Welfare Permission to reprint the abstract has not been received from the publisher. Recently, New Jersey and Wisconsin eliminated the practice of increasing the AFDC benefits of families that bear additional children while on the program. Policy makers seem to accept the notion that added benefits encourage participants to bear more children, despite little direct formal evidence. This paper uses data from the National Longitudinal Survey of Women to examine the impact of both the level of AFDC benefits and the per child increment on births, as well as the effect of benefit policy and childbearing on AFDC participation. Single-equation probit estimates suggest that women on AFDC are no more likely than nonparticipants to give birth over the five years following the observation, but that those births which do occur are positively associated with incremental AFDC benefits. When birth and welfare participation decisions are estimated sequentially in a nested logit framework, AFDC benefits are found to be a significant factor in the post-birth participation decision, and empirical support emerges for the hypothesis that AFDC benefits also encourage additional births. The estimated parameters are used to simulate the impact on participation and births of eliminating incremental benefits for both new program entrants and continuing participants. Even though the specification supports the "AFDC benefits cause births" hypothesis, eliminating the new-birth increment would reduce total program costs by less than 3 percent, since both the per dollar effect of benefits on births and the per child increments themselves are small. |
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Bibliography Citation
Powers, Elizabeth T. "The Impact of AFDC on Birth Decisions and Program Participation." Working Paper No. 9408, Federal Reserve Bank Cleveland, Ohio, June 1994. |