Volume 35, Number 3 (Summer) 2000
Ziliak, James P., David N. Figlio, Elizabeth E. Davis, and Laura S. Connolly. 2000. "Accounting for the Decline in AFDC Caseloads: Welfare Reform or the Economy?" Journal of Human Resources 35(3):570-586.
We use state-level monthly panel data to assess the relative contributions of the macroeconomy and welfare reform in accounting for the 1993-96 decline in Aid to Families with Dependent Children (AFDC) caseloads. Our results suggest that the decline in per capita AFDC caseloads is attributable largely to the economic conditions in states and not to waivers from federal welfare policies. Nationwide, we attribute 66 percent of the decline to the macroeconomy. However, we do find substantial heterogeneity in the impact and timing of alternative waivers on AFDC caseloads. States with waivers impacting parental responsibilities experienced greater caseload declines than states with waivers that made work more attractive. Overall, our model predicts that had it not been for the influence of economic factors, welfare reform would not have led to any decrease in aggregate caseloads.
James P. Ziliak is an assistant professor of economics at the University of Oregon; David N. Figlio is an assistant professor of economics at the University of Florida; Elizabeth E. Davis is an assistant professor of applied economics at the University of Minnesota; Laura S. Connolly is an assistant professor of economics at Oregon State University. The authors are grateful to Ebelyn Mills at the Office of Family Assistance, U.S. Department of Health and Human Services, for providing us with the caseload data. IN addition, we wish to thank two anonymous referees, David Card, Sheldon Danziger, Phil Levine, Marianne Page, Joe Stone, Steve Ziliak, and seminar participants at Bowling Green State University, Michigan State University, the University of Michigan, the 1997 Association for Public Policy and Management Meetings, and the 1998 North American Winter Econometric Society Meetings for helpful comments and discussion. The authors take responsibility for all remaining errors. The data used in this article can be obtained beginning March 2001 through February 2004 from James P. Ziliak, Department of Economics, 1285 University of Oregon, Eugene, OR 97403-1285.
© 2002 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X