Welfare Rules, Incentives, and Family Structure

We provide a new examination of the incentive effects of welfare rules on family structure among low-income women by emphasizing that the eligibility and benefit rules in the AFDC and TANF programs are based more on the biological relationship between the children and any male in the household than on marriage or cohabitation per se. Using data from 1996 through 2008, we analyze the effects of 1990s welfare reforms on family structure categories that incorporate the biological status of the male. Like past work, we find that most policies did not affect family structure. However, we do find that several work-related reforms increased single parenthood and decreased marriage to biological fathers. These results are especially evident when multiple work-related policies were implemented together and when we examine the longer term impacts of the policies. We posit that these effects of work-related welfare policies on family structure stem from their effects on increased labor force participation and earnings of single mothers combined with factors special to biological fathers, including a decline in their employment and wages. Robert A. Moffitt Department of Economics Johns Hopkins University 3400 North Charles Street Baltimore, MD 21218 and IZA and also NBER [email protected] Brian J. Phelan Department of Economics DePaul University 1 East Jackson Blvd. Chicago, IL 60604 [email protected] Anne E. Winkler Department of Economics University of Missouri-St. Louis One University Blvd. St. Louis, MO 63121 [email protected]