Full Citation

Title: Essays on the Political Economy of State Welfare Programs

Citation Type: Dissertation/Thesis

Publication Year: 1999

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Abstract: Evidence exists that welfare recipients migrate between states to seek more generous benefits, potentially leading states to lower AFDC benefits to avoid such welfare migration. Taken further, this raises the specter of states competitively lowering benefits in reaction to similar moves by other states. This model of policymaking assumes that benefits are solely a function of state characteristics. If benefits depend on the threat of welfare migration or other interstate competition, however, one must account for possible spillovers. Chapter 1 presents tests for the presence of welfare-policy spillovers in a panel of 47 states over the period 1979-1995. I find weak evidence of spillovers, even in the presence of state fixed effects and political and budgetary-control variables. Many studies analyzing the impact of AFDC on a woman's choice of household structure have limited themselves to one or another group of women: only unmarried women, only mothers, only teenage mothers, etc. In Chapter 2 I estimate a multinomial logit model of household structure that moves beyond previous studies in several ways. First, it allows marital status and fertility to vary across choices. Second, it captures the woman's earnings potential through predicted wages estimated from a model that accounts for selection bias in observed earnings. Third, it moves beyond the traditional focus on AFDC and Food Stamps to include state-specific values of federal energy assistance and state-funded general assistance programs as well as state-level AFDC policies other from the maximum benefit level. Cohabitation among single women has risen over many years. Beyond the well-known increase in premarital cohabitation, state welfare policies may encourage low-income women to coreside with other adults to save money. Using the 1990 Census, Chapter 3 tests for evidence that state welfare policies-including benefit levels, penalties for cohabitors' income, and disregards of unearned income-alter the proportion of women who live with other adults outside of marriage. Greater levels of education, which may represent higher earnings potential, are associated with more marriage among Black women but more cohabitation among Whites. States with more generous AFDC benefits also have fewer married women, as has been found in previous studies. The strictest policy on cohabitors' contributions toward housing costs has an unexpected positive relation to the probability of a woman cohabiting. A broader policy concerning cohabitors' contributions toward shared household expenses has no impact on marriage or cohabitation, however, while a similar policy treating a welfare recipient's unpredicted earnings more leniently has the expected positive impact on cohabitation.

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Authors: Smith, Mark W.

Institution: Yale University

Department: Economics

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Degree: Doctor of Philosophy

Publisher Location: New Haven, CT

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Data Collections: IPUMS USA

Topics: Family and Marriage, Migration and Immigration, Poverty and Welfare

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