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What Causes Public Assistance Caseloads to Grow?

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  • Rebecca M. Blank

Abstract

This paper uses state panel data to investigate changes in public assistance caseloads. Compared to other research, it uses more extensive data, both across states and over time; it utilizes a particularly rich set of control variables; it investigates the different subcomponents of the AFDC program separately; and it investigates the extent to which changes in caseloads are driven by changes in take-up rates versus in eligibility. The results indicate that an unexplained increase in AFDC-Basic caseloads started in the mid-1980s. This trend appears to be driven by three underlying components: a rise in child-only cases, an increase in take-up rates over the early 1990s during the economic slowdown, and a long-term increase in eligibility which is not well explained by a large set of control variables. In contrast, AFDC-UP caseload changes are relatively well-explained by the model in this paper and are far more responsive to economic factors. Recent state policy changes are correlated with caseload declines, but more than half of their affect appears to precede their implementation, suggesting that other changes in client and caseworker behavior was occurring in states that adopted major policy changes.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6343.

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Date of creation: Dec 1997
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Publication status: published as Blank, Rebecca. "What Causes Public Assistance Caseloads To Grow?," Journal of Human Resources, 2001, v36(1,Winter), 85-118.
Handle: RePEc:nbr:nberwo:6343

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  1. Hilary Williamson Hoynes, 1996. "Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?," NBER Working Papers 5643, National Bureau of Economic Research, Inc.
  2. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  3. Hilary Williamson Hoynes, 1995. "Does Welfare Play Any Role in Female Headship Decisions?," NBER Working Papers 5149, National Bureau of Economic Research, Inc.
  4. John M. Fitzgerald, 1995. "Local labor markets and local area effects on welfare duration," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(1), pages 43-67.
  5. Rebecca M. Blank & Patricia Ruggles, 1993. "When Do Women Use AFDC & Food Stamps? The Dynamics of Eligibility vs. Participation," NBER Working Papers 4429, National Bureau of Economic Research, Inc.
  6. Blank, Rebecca M & Card, David E, 1991. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1157-89, November.
  7. Robert Moffitt, 1987. "Historical Growth in Participation in Aid to Families with Dependent Children: Was There a Structural Shift?," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 9(3), pages 347-363, April.
  8. J. P. Ziliak & D. N. Figlio & E. E. Davis & L. S. Connolly, . "Accounting for the Decline in AFDC Caseloads: Welfare Reform or Economic Growth?," Institute for Research on Poverty Discussion Papers 1151-97, University of Wisconsin Institute for Research on Poverty.
  9. Richard P. Barth & Barbara Needell, 1997. "Using Performance Indicators With Child Welfare Policy Makers and Managers," JCPR Working Papers 15, Northwestern University/University of Chicago Joint Center for Poverty Research.
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