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Social Approval, Values, and AFDC: A Reexamination of the Illegitimacy Debate

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  • Thomas J. Nechyba

Abstract

This paper models the fertility decision of individuals who differ in their wage rate and their intensity of preferences for rearing children, and whose utility of having a child out of wedlock depends on the level of "social approval" associated with doing so. This social approval in turn is a function of the fraction of individuals in previous generations that chose to have children out of wedlock. The model is a straightforward extension of the typical rational choice model that motivates much of the empirical literaturea literature that has cast doubt on a strong link between AFDC and illegitimacy. However, the model introduces elements from epidemic models that many have in mind when arguing for such a link. As a result, the predictions of this extended model are consistent with empirical findings while at the same time linking the rise in illegitimacy solely to government welfare programs. Specifically, a program similar to AFDC is introduced into an economy with low illegitimacy rates, and a transition path to a new steady state is calculated. Along the transition path, observed cases of illegitimacy are rising among both the poor and nonpoor despite the fact that AFDC payments are held constant or even falling. The simultaneous trends of declining real welfare benefits and rising illegitimacy over the past two and a half decades are therefore not inconsistent with the view that illegitimacy might be caused primarily by government welfare policies. Although this paper certainly does not claim to prove such a link, it does suggest that current empirical approaches have been focused too much on an artificially narrow model and have thus given rise to results that can be differently interpreted in the context of a more natural model. At the same time, the model also suggests that welfare reform aimed at reducing the incentives for poor women to have out-of-wedlock births may not be as effective as policy makers who believe in a causal link between AFDC and illegitimacy might suspect.

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  • Thomas J. Nechyba, 2001. "Social Approval, Values, and AFDC: A Reexamination of the Illegitimacy Debate," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 637-666, June.
  • Handle: RePEc:ucp:jpolec:v:109:y:2001:i:3:p:637-666
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    Cited by:

    1. Holger Strulik, 2012. "Riding High: Success in Sports and the Rise of Doping Cultures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(2), pages 539-574, June.
    2. Brock, William A. & Durlauf, Steven N., 2007. "Identification of binary choice models with social interactions," Journal of Econometrics, Elsevier, vol. 140(1), pages 52-75, September.
    3. Holger Strulik, 2013. "School Attendance And Child Labor—A Model Of Collective Behavior," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 246-277, April.
    4. Michael Baker & Emily Hanna & Jasmin Kantarevic, 2004. "The Married Widow: Marriage Penalties Matter!," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 634-664, June.
    5. Charles H. Mullin & Ping Wang, 2002. "The Timing of Childbearing among Heterogeneous Women in Dynamic General Equilibrium," NBER Working Papers 9231, National Bureau of Economic Research, Inc.
    6. Lafortune, Jeanne & Low, Corinne, 2017. "Betting the House: How Assets Influence Marriage Selection, Marital Stability, and Child Investments," IZA Discussion Papers 11176, Institute for the Study of Labor (IZA).
    7. Strulik, Holger, 2014. "A mass phenomenon: The social evolution of obesity," Journal of Health Economics, Elsevier, vol. 33(C), pages 113-125.
    8. Martin Halla & Mario Lackner & Johann Scharler, 2016. "Does the Welfare State Destroy the Family? Evidence from OECD Member Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(2), pages 292-323, April.
    9. Qingyan Shang, 2014. "Endogenous neighborhood effects on welfare participation," Empirical Economics, Springer, vol. 47(2), pages 639-667, September.
    10. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 1019-1055.
    11. Anandi Mani & Charles H. Mullin, 2001. "Social Approval and Teenage Childbearing," Vanderbilt University Department of Economics Working Papers 0103, Vanderbilt University Department of Economics.
    12. Lingxin Hao & V. Joseph Hotz & Ginger Zhe Jin, 2000. "Games Daughters and Parents Play: Teenage Childbearing, Parental Reputation, and Strategic Transfers," JCPR Working Papers 167, Northwestern University/University of Chicago Joint Center for Poverty Research.
    13. Hiller, Victor & Recoules, Magali, 2013. "Changes in divorce patterns: Culture and the law," International Review of Law and Economics, Elsevier, vol. 34(C), pages 77-87.
    14. Thomas J. Nechyba, 2001. "Social Approval, Values, and AFDC: A Reexamination of the Illegitimacy Debate," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 637-666, June.
    15. 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.
    16. Strulik, Holger, 2008. "The Role of Poverty and Community Norms in Child Labor and Schooling Decisions," Proceedings of the German Development Economics Conference, Zurich 2008 42, Verein für Socialpolitik, Research Committee Development Economics.
    17. Moffitt, Robert A., 2002. "Welfare programs and labor supply," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 34, pages 2393-2430 Elsevier.
    18. Neal, Derek, 2006. "Why Has Black-White Skill Convergence Stopped?," Handbook of the Economics of Education, Elsevier.
    19. Jagannathan, Radha & Camasso, Michael J., 2011. "Message and price components of Family Caps: Experimental evidence from New Jersey," Evaluation and Program Planning, Elsevier, vol. 34(3), pages 292-302, August.
    20. Todd D. Kendall & Robert Tamura, 2010. "Unmarried Fertility, Crime, and Social Stigma," Journal of Law and Economics, University of Chicago Press, vol. 53(1), pages 185-221, February.
    21. John Ermisch, 2009. "The rising share of nonmarital births: is it only compositional effects?," Demography, Springer;Population Association of America (PAA), vol. 46(1), pages 193-202, February.

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    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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