Accounting for the Decline in AFDC Caseloads: Welfare Reform or Economic Growth?
Nationwide, AFDC caseloads have decreased by about 18 percent since March 1994, while some states, such as Wisconsin, Indiana, and Oregon, have seen declines of 40 percent or more. Two factors are frequently suggested as possible causes: state-level experiments with welfare reform and strong economic growth. In this paper, we use state-level monthly panel data from 1987 to 1996 to assess the importance of each of these factors by estimating a model of AFDC caseloads as a dynamic function of time-dependent state welfare reform variables (welfare waivers) and economic variables such as per capita employment. Our results from the dynamic model suggest that the decline in per capita AFDC caseloads is attributable largely to the economic growth of states and not to waivers from federal welfare policies. In the 26 states experiencing at least a 20 percent decline in per capita AFDC caseloads between 1993 and 1996, we attribute 78 percent of the decline to business-cycle factors and 6 percent to welfare waivers.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: 3412 Social Science Building, 1180 Observatory Drive, Madison, WI 53706|
Phone: (608) 262-6358
Fax: (608) 265-3119
Web page: http://www.ssc.wisc.edu/irp/dp/dplist.htm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Edward M. Gramlich & Deborah S. Laren, 1984. "Migration and Income Redistribution Responsibilities," Journal of Human Resources, University of Wisconsin Press, vol. 19(4), pages 489-511.
- Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
- 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.
- Robert A. Moffitt, 1996. "The effect of employment and training programs on entry and exit from the welfare caseload," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(1), pages 32-50.
- H. W. Hoynes, .
"Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?,"
Institute for Research on Poverty Discussion Papers
1104-96, University of Wisconsin Institute for Research on Poverty.
- 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.
- Hilary Williamson Hoynes, 1996. "Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?," NBER Working Papers 5643, National Bureau of Economic Research, Inc.
- Shroder, Mark, 1995. "Games the States Don't Play: Welfare Benefits and the Theory of Fiscal Federalism," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 183-91, February.
When requesting a correction, please mention this item's handle: RePEc:wop:wispod:1151-97. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)
If references are entirely missing, you can add them using this form.