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What Did the "Illegitimacy Bonus" Reward?


  • 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)


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

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    References listed on IDEAS

    1. Robert A. Moffitt, 2003. "The Temporary Assistance for Needy Families Program," NBER Chapters,in: Means-Tested Transfer Programs in the United States, pages 291-364 National Bureau of Economic Research, Inc.
    2. Joyce Ted & Kaestner Robert & Korenman Sanders, 2003. "Welfare Reform and Non-Marital Fertility in the 1990s: Evidence from Birth Records," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-36, December.
    3. Ted Joyce & Robert Kaestner & Sanders Korenman & Stanley Henshaw, 2004. "Family Cap Provisions and Changes in Births and Abortions," NBER Working Papers 10214, National Bureau of Economic Research, Inc.
    4. Kaestner, Robert & Kaushal, Neeraj & Van Ryzin, Gregg, 2003. "Migration consequences of welfare reform," Journal of Urban Economics, Elsevier, vol. 53(3), pages 357-376, May.
    5. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
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    More about this item

    JEL classification:

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


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