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What Did the "Illegitimacy Bonus" Reward?

Author

Listed:
  • Korenman Sanders

    (Baruch College, CUNY and NBER)

  • Joyce Ted

    (Baruch College, City University of NY)

  • Kaestner Robert

    (University of Illinois at Chicago)

  • Walper Jennifer

    (Baruch College, CUNY)

Abstract

The Out-Of-Wedlock Birth Reduction Bonus ("Illegitimacy Bonus"), part of the 1996 welfare reform legislation, awarded up to $100 million in each of five years to the five states with the greatest reduction in the non-marital birth ratio. Alabama, Michigan, and Washington D.C. each won bonuses four or more times, claiming nearly 60% of award monies. However, for these bonus winners, changes in the racial composition of births accounted for between one-third and 100% of the decline in the non-marital birth ratio. The non-marital birth ratio fell most in D.C., averaging 1.5 percentage points per year over the award period. Declines in non-marital birth ratios in Michigan and Alabama were slight. But the non-marital birth ratio fell in D.C. in large part because the number of black children born there fell dramatically, and a decline in the black population alone accounted for one third of the decline in black births. Within-race changes in non-marital birth ratios raised the overall non-marital birth ratio 0.5 percentage points in Alabama, and lowered the non-marital ratio by one percentage point in Michigan, and by about three percentage points in Washington D.C. Because it was based on unadjusted changes in states' aggregate non-martial birth ratios, the Illegitimacy Bonus rewarded racial/ethnic compositional changes at least as much as it rewarded declining non-marital birth ratios within major racial/ethnic groups.

Suggested Citation

  • Korenman Sanders & Joyce Ted & Kaestner Robert & Walper Jennifer, 2006. "What Did the "Illegitimacy Bonus" Reward?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-36, April.
    • Handle: RePEc:bpj:bejeap:v:topics.6:y:2006:i:1:n:8
    DOI: 10.2202/1538-0653.1402
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    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J1 - Labor and Demographic Economics - - Demographic Economics

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