reduction in work resulting from the disincentives embedded in assistance programs (see Danziger, Haveman, and Plotnick, 1981, and Moffitt, 1992, for extensive literature reviews on the subject). Although evidence shows that AFDC reduces the number of hours worked by single mothers, the estimates of those reductions vary among studies—from 1 to 10 hours per week. Moffitt (1992), in his review of the literature, concludes that "there is still considerable uncertainty regarding the magnitude of the effects."

Moffitt (1992) points out that there is very little research on the effects of in-kind assistance on labor supply.8 He also notes the importance of exploring the effects of multiple assistance programs; however, these effects are difficult to model, and little work has been done in the area.

Family Structure Decisions

Much of the literature on family structure focuses on whether AFDC encourages the formation of single-parent families headed by women. Since benefits are targeted to mothers with children and no spouse present, they may provide incentives to delay marriage or remarriage, to obtain a divorce, or to have children outside of marriage. Early work looking at the effect of AFDC on the increase in female-headed families is extremely mixed (see the summary in Groeneveld, Hannan, and Tuma, 1983). Studies in the 1980s, however, show more consistent evidence of an effect (see Danziger et al., 1982; Ellwood and Bane, 1985; Hoffman and Duncan, 1988; Moffitt, 1992). There is also some evidence of an effect of AFDC benefit levels on the probability that a female head lives independently rather than in a larger family (see Ellwood and Bane, 1985; Hutchens, Jakubson, and Schwartz, 1989).

Extensive research has been done on the effect of AFDC on illegitimacy. The work has studied whether the existence of public assistance increases the chances that babies will be born to unmarried women since a woman no longer needs a husband to help support a child. The work has also considered whether the existence of public assistance increases the likelihood that a woman will have a child in order to become eligible for benefits at all or have another child in order to receive additional benefits. The evidence on this issue in the literature is inconclusive: some studies find effects for some groups (e.g., white or black teenagers), and others find no effects for the same groups (see Duncan and Hoffman, 1990; Ellwood and Bane, 1985; An, Haveman, and Wolfe, 1991; Lundburg and Plotnick, 1990; Plotnick, 1990).

Migration Effects

The extent to which the wide variation in AFDC benefit levels across states influences patterns of interstate migration is of

8  

See Fraker and Moffitt (1988) on the disincentive effects of the Food Stamp Program on the labor supply of female heads. Blank (1989), Moffitt and Wolfe (1990), and Winkler (1989) have analyzed the labor supply effects of the Medicaid program on the Medicaid-eligible population.



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