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Children's Welfare Exposure and Subsequent Development

  • Phillip B. Levine
  • David J. Zimmerman

We examine the extent to which children are exposed to the welfare system through their mother's receipt of benefits and its impact on several developmental outcomes. Using data from the matched mother-child file from the National Longitudinal Survey of Youth (NLSY), we find that children's welfare exposure is substantial. By age 10, over one-third of all children will have lived in a welfare household; black, non-Hispanic children face a much higher rate of exposure. Simple correlations suggest a strong negative relationship between maternal welfare receipt and children's outcomes. In this paper, we implement three alternative strategies (instrumental variables, sibling difference, and child fixed-effects models) designed to identify whether this correlation can be attributed to the mother's welfare receipt directly or to other characteristics of mothers who receive welfare, regardless of whether those characteristics are observable evidence of any causal link between maternal welfare receipt and children's developmental outcomes.

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Paper provided by Northwestern University/University of Chicago Joint Center for Poverty Research in its series JCPR Working Papers with number 130.

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Date of creation: 01 Jan 2000
Date of revision:
Handle: RePEc:wop:jopovw:130
Contact details of provider: Postal: Harris Graduate School of Public Policy Studies, 1155 E. 60th Street Chicago, IL 60637
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  1. Janet Currie, 1993. "Welfare and the Well-Being of Children: The Relative Effectiveness of Cash and In-Kind Transfers," NBER Working Papers 4539, National Bureau of Economic Research, Inc.
  2. M. Anne Hill & June O'Neill, 1994. "Family Endowments and the Achievement of Young Children with Special Reference to the Underclass," Journal of Human Resources, University of Wisconsin Press, vol. 29(4), pages 1064-1100.
  3. Currie, Janet & Cole, Nancy, 1993. "Welfare and Child Health: The Link between AFDC Participation and Birth Weight," American Economic Review, American Economic Association, vol. 83(4), pages 971-85, September.
  4. Gottschalk, Peter, 1990. "AFDC Participation across Generations," American Economic Review, American Economic Association, vol. 80(2), pages 367-71, May.
  5. P. B. Levine & D. J. Zimmerman, . "The intergenerational correlation in AFDC participation: Welfare trap or poverty trap?," Institute for Research on Poverty Discussion Papers 1100-96, University of Wisconsin Institute for Research on Poverty.
  6. Antel, John J, 1992. "The Intergenerational Transfer of Welfare Dependency: Some Statistical Evidence," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 467-73, August.
  7. Jonathan Gruber, 1996. "Cash Welfare as a Consumption Smoothing Mechanism for Single Mothers," NBER Working Papers 5738, National Bureau of Economic Research, Inc.
  8. An, Chong-Bum & Haveman, Robert & Wolfe, Barbara, 1993. "Teen Out-of-Wedlock Births and Welfare Receipt: The Role of Childhood Events and Economic Circumstances," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 195-208, May.
  9. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  10. Gruber, Jonathan, 2000. "Cash welfare as a consumption smoothing mechanism for divorced mothers," Journal of Public Economics, Elsevier, vol. 75(2), pages 157-182, February.
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