Myth: Welfare gives mothers an economic incentive to have more children.
Fact: Studies have not found a correlation between size of welfare benefits and families.
Summary
Welfare mothers actually have less of an economic incentive to
have children than nonwelfare mothers. Studies have not been able to find
a correlation between family size and the size of welfare benefits. Welfare
families are virtually the same size as nonwelfare families; indeed, both
have been declining over the decades. The New Jersey "family cap"
experiment, which denies extra benefits to mothers who have more children,
appears to have no effect on the welfare birthrate.
Argument
Many conservatives criticize welfare because it increases benefits
when a mother has another child. This, they argue, is an economic incentive
to have more children, an ill-considered policy which inflates the rolls
of our welfare programs. As columnist Ellen Goodman wrote: "A family
that works does not get a raise for having a child. Why then
should a family that doesn't work?" (1)
Unfortunately, this argument is incorrect. Working families do
receive "financial incentives" to have more children, and far
larger ones than welfare provides. A working family receives a $2,450 tax
deduction per child, and can claim up to $2,400 in tax credits to offset
the costs of child care. By comparison, a welfare mother can only expect
about $90 per month in increased AFDC payments for another child.
Not surprisingly, these "incentives" are too small to influence
the behavior of potential parents, especially in a decision as life-altering
and important as having a child. Ten major studies have been conducted
on this issue in the last six years alone, and not one has found any connection
between the level of payments offered and a woman's decision to bear children.
(2)
Just one of these studies' findings is that states with higher benefits
do not see higher birthrates among its welfare mothers. According to a
1992 study by Child Trends Inc., the five states with the highest birth
rates among 18- and 19-year-old women -- Arizona, Arkansas, Mississippi,
Nevada and New Mexico -- all have AFDC benefits below the national median.
The four states with the lowest birth rates among 18- and 19-year-old women
-- Massachusetts, New Hampshire, North Dakota and Vermont -- all have AFDC
benefits above the national median.
The average AFDC family is virtually the same size as the average American
family. Of all welfare families, 73.9 percent have two children or less.
(3) Of all American families with children, this figure is 79.1 percent.
(4) (Families without children are not qualified for welfare, even though
they may need it, so there are conceptual problems with adding childless
families to either side of this comparison.)
And, contrary to popular belief, the size of welfare families has been
declining over the decades:
Decline in Average AFDC Family Size, 1969-1992: (5)
Year Family size
---------------------
1969 4.0 persons
1973 3.6
1975 3.2
1986 3.0
1992 2.9
Conservatives might point out that individual welfare benefits have
also been declining over the years, hence the falling size of welfare families.
(Between 1970 and 1991, the purchasing power of benefits for the typical
AFDC family fell 42 percent, primarily as a result of state and federal
cuts.) (6) However, the average size of all families in the U.S.
has been falling for many decades now:
Average size of U.S. families (7)
Year Family size
---------------------
1960 3.7 persons
1970 3.6
1980 3.3
1990 3.2
This overall decline reflects the end of the Baby Boom in the mid-60s.
The New Jersey "Family Cap" Experiment
In August 1993, New Jersey became the first state in the union
to experiment with the "family cap," a policy of denying additional
benefits to welfare mothers who have more children. Conservatives predicted
the new policy would curb the rise of single motherhood and illegitimate
births, even though other conservatives feared it would drive up the abortion
rate.
Results of the New Jersey experiment are mixed and inconclusive, partly
because the benefits are not really capped. The first analysis of the family
cap was announced by the Heritage Foundation (a conservative think tank),
which claimed that in the sixteen months after the family cap took effect,
the average monthly birth rate for New Jersey welfare mothers declined
by 10 percent or more. (8)
However, the study turned out to be a typical bit of partisan think
tank analysis. A more serious, 5-year study is being conducted by Michael
Camasso at Rutgers University. The Rutgers study is comparing two groups:
mothers who would receive more benefits if they had additional children
while on welfare, and those who would be denied increased payments under
the family cap. In a letter published by the Washington Post, Camasso
wrote: "From August 1993 through July 1994 there is not a statistically
significant difference between the birth rates in the experimental and
control groups."
Although the Heritage study was correct in noticing a drop in birthrates
among New Jersey's welfare mothers, this drop was also true of New Jersey
mothers as a whole. And at any rate, the welfare benefits weren't really
capped. Although welfare mothers who have more children are denied an extra
$40 or $50 a month in AFDC, there is still additional food stamps, Medicaid,
and sometimes housing assistance available.
Gregory Acs of the Urban Institute urges caution in interpreting the
results so far. "It is indefensible to
extrapolate from these results to recommendations for major changes
in the nation's welfare system. Claims that eliminating welfare will virtually
eliminate 'illegitimacy' are simultaneously unsupportable and irrefutable
by conventional social science." (9)
Return to Overview
Endnotes:
1. Ellen Goodman, editorial column in Boston Globe, April
16, 1992.
2. Gregory Acs, "Does Welfare Promote Out-of-Wedlock Childbearing?",
p. 53 in Isabel V. Sawhill (ed.), Welfare Reform: Analysis of the Issues
(Washington, DC: The Urban Institute, 1995). See also Urban Policy and
Research Report, Fall 1993.
3. Overview of Entitlement Programs, Committee on Ways and Means, U.S.
House of Representatives (U.S. Government Printing Office, 1994).
4. U.S. Bureau of the Census, Current Population Reports, P20-447,
1994 data.
5. U.S. House Ways and Means Committee, 1994 Green Book, p.
401.
6. Paul Taylor, "When Safety Nets Leave the Needy in Free Fall,"
Washington Post National Weekly Edition, September 9-11, 1991.
7. U.S. Bureau of the Census, Current Population Reports, P20-477.
8. Robert Rector, "The Impact of New Jersey's Family Cap on Out-of-Wedlock
Births and Abortions," Heritage Foundation, September 6, 1995.
9. Gregory Acs, "Does Welfare Promote Out-of-Wedlock Childbearing?",
p. 54 in Sawhill, Welfare Reform.