The interaction between single mothers' living arrangements and welfare participation
This article examines the interaction between single mothers' living arrangements and their welfare participation, taking into account the endogeneity embedded in the two decisions. Using data from the 1990 Survey of Income and Program Participation, I estimate a two-stage instrumental variables model and simulate the effects of partial- and full-family benefit reductions on both the distribution of living arrangements and the rate of welfare participation. Tabulations show that 62 percent of single mothers live independently, 16 percent live in the home of their parents, 12 percent cohabit with an unrelated man, and 11 percent share with others. Reductions in combined AFDC and food stamp benefits increase mothers' probability of living with their parents relative to living independently, cohabiting, or sharing with others. Benefit reductions also decrease the probability of welfare receipt. The resulting drop in the participation rate is even more pronounced once the simultaneous effect on the distribution of living arrangements is taken into account. The implication of these findings is that policies aimed at reducing welfare caseloads may have the unanticipated effect of shifting families' living arrangements, potentially confounding the impacts of policy changes in either positive or negative ways. © 2000 by the Association for Public Policy Analysis and Management.
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Volume (Year): 19 (2000)
Issue (Month): 1 ()
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- Robert Hutchens & George Jakubson & Saul Schwartz, 1989. "AFDC and the Formation of Subfamilies," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 599-628.
- R. A. Moffitt & R. Reville & A. E. Winkler, "undated". "Beyond single mothers: Cohabition, marriage, and the U.S. welfare system," Institute for Research on Poverty Discussion Papers 1068-95, University of Wisconsin Institute for Research on Poverty.
- Rebecca M. Blank & Patricia Ruggles, 1993. "When Do Women Use AFDC & Food Stamps? The Dynamics of Eligibility vs. Participation," NBER Working Papers 4429, National Bureau of Economic Research, Inc.