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Welfare Benefits and Female Headship in U.S. Time Series

  • R. A. Moffitt

A considerable amount of work has been done on the relationship between AFDC benefits and family structure in the United States. The evidence to date—based on cross-state variation in welfare benefits and family structure, often with state fixed effects—indicates that there is some nonzero effect of those benefits on marriage and fertility, although disagreement remains about the magnitude of the effect. It is undisputed, however, that time-series trends in family structure are not correlated in the direction that the cross-state evidence would suggest, because real benefits have been falling, even relative to wages, in aggregate time series. This paper reexamines the time-series evidence with particular attention to the role of wages in explaining trends in headship, and notes that the correct specification includes male as well as female wages. When both are controlled, welfare benefits have a slight positive impact on female headship even in time series. The results demonstrate the importance of labor market factors in explaining trends in female headship.

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File URL: http://www.irp.wisc.edu/publications/dps/pdfs/dp121901.pdf
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Paper provided by University of Wisconsin Institute for Research on Poverty in its series Institute for Research on Poverty Discussion Papers with number 1219-01.

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Handle: RePEc:wop:wispod:1219-01
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  1. Danziger, Sheldon, et al, 1982. "Work and Welfare as Determinants of Female Poverty and Household Headship," The Quarterly Journal of Economics, MIT Press, vol. 97(3), pages 519-34, August.
  2. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  3. Hotz, V-J & Kerman, J-A & Willis, R-J, 1996. "The Economics of Fertility in Developed Countries : A Survey," Papers 96-09, RAND - Labor and Population Program.
  4. Dickins, William T, 1990. "Error Components in Grouped Data: Is It Ever Worth Weighting?," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 328-33, May.
  5. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
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