A DECADE OF DECLINING WELFARE PARTICIPATION: SORTING OUT THE CAUSES

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Abstract

Since the late 1970s, the proportion of all single‐parent families receiving benefits from the Aid to Families with Dependent Children (AFDC) program has been declining. This is reversing an earlier two‐decade trend. This paper uses data from the Current Population Survey so as to investigate the reasons for the decline. The analysis reveals that for the years prior to 1981, the decline has resulted both from an erosion in real AFDC guarantee levels–caused by high rates of inflation–and from changes in demographic conditions. For the years subsequent to 1981, the decline has resulted from an increase in effective AFDC benefit reduction rates caused by the Omnibus Reconciliation Act of 1981. Somewhat offsetting the participation rate decline were falling real child support collections and a rising unemployment rate.

Original languageEnglish (US)
Pages (from-to)110-123
Number of pages14
JournalContemporary Economic Policy
Volume8
Issue number1
DOIs
StatePublished - Jan 1 1990
Externally publishedYes

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ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Public Administration

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