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The effect of incremental benefit levels on births to AFDC recipients

  • Robert W. Fairlie

    (Department of Economics, University of California at Santa Cruz, Santa Cruz, California)

  • Rebecca A. London

    (Berkeley Planning Associates, Berkeley, California)

We examine the relationship between fertility and incremental AFDC benefits using the 1990 Panel of the Survey of Income and Program Participation (SIPP). Estimating a logit equation for the probability of a higher-order birth among a sample of AFDC recipients, we find a positive coefficient (although statistically insignificant) on the incremental AFDC benefit level. However, we find a positive correlation between incremental benefits and fertility for several nonrecipient comparison groups which is larger than the positive correlation for AFDC recipients. This finding suggests that the previously estimated relationship between incremental benefits and fertility among AFDC recipients is largely the result of a spurious correlation. We find similar results among whites, blacks, and never-married women, but less consistent results among Hispanics and divorced or separated women. We infer from these results that family cap policies, which eliminate the incremental benefits entitled to AFDC recipients who have additional children, are not likely to result in a large reduction in the number of out-of-wedlock births to AFDC recipients.

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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 16 (1997)
Issue (Month): 4 ()
Pages: 575-597

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Handle: RePEc:wly:jpamgt:v:16:y:1997:i:4:p:575-597
Contact details of provider: Web page: http://www3.interscience.wiley.com/journal/34787/home

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  1. 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.
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