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Social Approval, Values, and AFDC: A Re-Examination of the Illegitimacy Debate

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  • Thomas J. Nechyba

Abstract

Empirical attempts to link teenage out-of-wedlock births to the incentive structure of Aid to Families with Dependent Children (AFDC) have met with mixed results. This has suggested to many researchers that, while the AFDC program contains incentives for poor women to have children out-of-wedlock, these incentives cannot be the primary culprit responsible for current levels of out-of-wedlock births. This paper presents a model that is consistent with the stylized facts and the empirical evidence but establishes a mechanism through which AFDC could in fact be the primary reason for observed levels of illegitimacy. The model is standard with one exception: How much utility individuals are able to obtain from having a child depends on the level of social approval' that is associated with having out-of-wedlock children. This social approval is a function of the fraction of individuals in all previous generations who chose to have children out-of-wedlock, where the effect of each generation diminishes with time. While the model is successful in replicating the stylized facts on AFDC and illegitimacy and establishes a link between the two through a government induced change in values,' it also demonstrates 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, 1999. "Social Approval, Values, and AFDC: A Re-Examination of the Illegitimacy Debate," NBER Working Papers 7240, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7240
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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.
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    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.
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    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.
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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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