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What Causes Public Assistance Caseloads to Grow?

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  • Rebecca M. Blank

Abstract

This paper uses state panel data to investigate changes in public assistance caseloads through the end of the AFDC program in 1996, with particular attention to the rapid increase in caseloads between 1990 and 1994. Previous research has focussed on total caseloads, with attention to economic and policy variables, and does a relatively poor job of explaining this caseload increase. This paper utilizes a much richer set of control variables to investigate the causes of caseload change; it separates AFDC caseloads into three subcomponent programs, separately investigates changes within the AFDC-UP program, AFDC child-only cases, and the remaining "core" AFDC cases (with benefits paid to single mothers and their children); and it explores whether this caseload rise was driven by changes in take-up rates versus in eligibility. The results indicate a large unexplained rise in total AFDC caseloads, even with a very rich specification. A good share of this is due to sharp increases in child-only cases, driven by program and demographic shifts. To a lesser extent, this rise was caused by the expansion of AFDC-UP to all states. These two factors explain half of the overall rise, and all of the unexplained rise in AFDC caseloads. The remaining increase in "core" AFDC cases-with benefits paid to single mothers and their children-is well explained within the model, and is the result of economic, demographic, political and policy changes. These variables appear to have increased eligibility among the core AFDC population in the early 1990s during the economic slowdown. Take-up rates also increased during this time period, but not by a large amount.

Suggested Citation

  • Rebecca M. Blank, 2000. "What Causes Public Assistance Caseloads to Grow?," JCPR Working Papers 18, Northwestern University/University of Chicago Joint Center for Poverty Research.
    • Handle: RePEc:wop:jopovw:18
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    References listed on IDEAS

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    1. 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.
    2. Hilary Williamson Hoynes, 2000. "Local Labor Markets And Welfare Spells: Do Demand Conditions Matter?," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 351-368, August.
    3. Rebecca M. Blank & David E. Card, 1991. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1157-1189.
    4. J. P. Ziliak & D. N. Figlio & E. E. Davis & L. S. Connolly, "undated". "Accounting for the Decline in AFDC Caseloads: Welfare Reform or Economic Growth?," Institute for Research on Poverty Discussion Papers 1151-97, University of Wisconsin Institute for Research on Poverty.
    5. Robert Moffitt, 1987. "Historical Growth in Participation in Aid to Families with Dependent Children: Was There a Structural Shift?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 9(3), pages 347-363, March.
    6. 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.
    7. Steven Garasky, 1990. "Analyzing the Effect of Massachusetts' ET Choices Program on the State's Afdc-Basic Caseload," Evaluation Review, , vol. 14(6), pages 701-710, December.
    8. Richard P. Barth & Barbara Needell, 1997. "Using Performance Indicators With Child Welfare Policy Makers and Managers," JCPR Working Papers 15, Northwestern University/University of Chicago Joint Center for Poverty Research.
    9. H. W. Hoynes, "undated". "Does welfare play any role in female headship decisions?," Institute for Research on Poverty Discussion Papers 1078-95, University of Wisconsin Institute for Research on Poverty.
    10. John M. Fitzgerald, 1995. "Local labor markets and local area effects on welfare duration," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(1), pages 43-67.
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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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