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What Did the "Illegitimacy Bonus" Reward?

  • Sanders Korenman
  • Ted Joyce
  • Robert Kaestner
  • Jennifer Walper

The 'Illegitimacy Bonus,' part of 1996 welfare reform legislation, awarded $100 million in each of five years to the five states with the greatest reduction in the nonmarital birth ratio. Three states -- Alabama, Michigan, and Washington DC -- won bonuses four or more times each, claiming nearly 60% of award monies. However, in none of these three states was the decline in the nonmarital birth ratio linked to increases in proportions married, and only in Michigan was it linked to declines in nonmarital (relative to marital) fertility within demographic groups, behavioral changes that the Illegitimacy Bonus was presumably intended to reward. Shifts in the racial composition of births accounted for 1/3 (Michigan), 2/3 (DC) or all (Alabama) of the decline in the nonmarital birth ratio. The non-marital birth ratio fell most in DC, averaging 1.5 percentage points per year over the award period. However, the number of black children born in DC fell by nearly one half from 1991 to 2001. Changes in population composition alone primarily a decline in the number of black women aged 15 to 34 can account for the entire decline in the nonmarital birth ratio in DC between 1990 and 2000.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10699.

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Date of creation: Aug 2004
Date of revision:
Publication status: published as 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:nbr:nberwo:10699
Note: HE CH
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  1. Theodore Joyce & Robert Kaestner & Sanders Korenman, 2002. "Welfare Reform and Non-Marital Fertility in the 1990s: Evidence from Birth Records," NBER Working Papers 9406, National Bureau of Economic Research, Inc.
  2. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," NBER Working Papers 8983, National Bureau of Economic Research, Inc.
  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. Robert Kaestner & Neeraj Kaushal & Gregg Van Ryzin, 2001. "Migration Consequences of Welfare Reform," NBER Working Papers 8560, National Bureau of Economic Research, Inc.
  5. Robert Moffitt, 2001. "The Temporary Assistance for Needy Families Program," Economics Working Paper Archive 463, The Johns Hopkins University,Department of Economics.
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