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Is There an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap

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  • Melissa Schettini Kearney

Abstract

A number of states have recently instituted family cap policies, under which women who conceive a child while receiving cash assistance are not entitled to additional cash benefits upon the birth of the child. This paper takes advantage of the variation across states in the timing of the policy's implementation to determine if family cap policies are discouraging women from having additional births. Vital statistics birth data for the years 1989 to 1998 offer no evidence that family cap policies lead to a reduction in births to women ages 15 to 34. The data reject a decline in births of more than one percent. The finding is robust to multiple specification checks. The data also reject large declines in higher-order births among demographic groups with relatively high welfare participation rates. Curiously, the data suggest increases in higher-order births to unmarried black and white high-school dropouts and to unmarried black teens approximately one year after the implementation of a family cap. The data reject a decline in births of more than four percent for unmarried white high-school graduates and unmarried white teens.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9093.

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Date of creation: Aug 2002
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Publication status: published as Kearney, Melissa S. “Is There an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap." Journal of Human Resources 39, 2 (2004): 295-325.
Handle: RePEc:nbr:nberwo:9093

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  1. Williamson Hoyne, Hilary, 1997. "Does welfare play any role in female headship decisions?," Journal of Public Economics, Elsevier, Elsevier, vol. 65(2), pages 89-117, August.
  2. Bronars, Stephen G & Grogger, Jeff, 1994. "The Economic Consequences of Unwed Motherhood: Using Twin Births as a Natural Experiment," American Economic Review, American Economic Association, American Economic Association, vol. 84(5), pages 1141-56, December.
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  4. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
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  6. An, Chong-Bum & Haveman, Robert & Wolfe, Barbara, 1993. "Teen Out-of-Wedlock Births and Welfare Receipt: The Role of Childhood Events and Economic Circumstances," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 195-208, May.
  7. P. K. Robins & P. Fronstin, . "Welfare benefits and family-size decisions of never-married women," Institute for Research on Poverty Discussion Papers 1022-93, University of Wisconsin Institute for Research on Poverty.
  8. James P. Ziliak & David N. Figlio & Elizabeth E. Davis & Laura S. Connolly, 2000. "Accounting for the Decline in AFDC Caseloads: Welfare Reform or the Economy?," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 570-586.
  9. Lundberg, Shelly & Plotnick, Robert D, 1995. "Adolescent Premarital Childbearing: Do Economic Incentives Matter?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 13(2), pages 177-200, April.
  10. Robert W. Fairlie & Rebecca A. London, 1997. "The effect of incremental benefit levels on births to AFDC recipients," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(4), pages 575-597.
  11. Greg Duncan & Saul Hoffman, 1990. "Welfare benefits, economic opportunities, and out-of-wedlock births among black teenage girls," Demography, Springer, Springer, vol. 27(4), pages 519-535, November.
  12. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(1), pages 249-275, February.
  13. Saul D. Hoffman & E. Michael Foster, 1997. "AFDC Benefits and Nonmarital Births to Young Women," JCPR Working Papers, Northwestern University/University of Chicago Joint Center for Poverty Research 3, Northwestern University/University of Chicago Joint Center for Poverty Research.
  14. Gregory Acs, 1996. "The Impact of Welfare on Young Mothers' Subsequent Childbearing Decisions," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 898-915.
  15. 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.
  16. Ann E. Horvath-Rose & H. Elizabeth Peters, 2000. "Welfare Waivers and Non-Marital Childbearing," JCPR Working Papers, Northwestern University/University of Chicago Joint Center for Poverty Research 128, Northwestern University/University of Chicago Joint Center for Poverty Research.
  17. Robert Moffitt, 1994. "Welfare Effects on Female Headship with Area Effects," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 621-636.
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