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OCR for page 134
6
Changing Family Formation Behavior
Through Welfare Reform
Rebecca Maynard, Elisabeth Boehnen, Tom Corbett,
and Gary San(lefur, with lane Mostly
Aid to Families with Dependent Children (AFDC), the signature program of
federal welfare policy and the traditional focal point of welfare reform discus-
sions, was replaced by Temporary Assistance for Needy Families (TANF) when
Congress passed and President Clinton signed the Personal Responsibility and
Work Opportunity Reconciliation Act (hereafter PRWORA) on August 22, 1996.
Among other things, this legislation ends entitlement to program benefits and
devolves program authority to the states in the form of block grants or fixed
federal fiscal contributions. PRWORA sets forth four principal goals: (1) to
provide assistance to needy families so that children may be cared for in their
own homes; (2) to end the dependency of needy parents on government support
by promoting job preparation, employment, and marriage; (3) to prevent and
reduce the incidence of out-of-wedlock and teen pregnancies and births and to
establish annual numerical goals for preventing and reducing the incidence of
these pregnancies; and (4) to encourage the formation and maintenance of two-
parent families (U.S. House of Representatives, 1996b).
The goals of PRWORA mirror those of many state welfare reform demon-
strations that were initiated under what were termed Section 1115 waivers of
federal welfare policies.] By the mid-199Os, states were proposing sweeping and
dramatic changes in their AFDC programs, with strong encouragement from the
1Section 1115 of the Social Security Act, added in 1962, authorized research and experimentation
with federal welfare policies. In the 1980s and l990s, Section 1115 became the means by which
states endeavored to initiate welfare reforms involving departures from requirements or principles of
federal law.
134
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REBECCA MAYNARD ET AL.
135
Clinton administration. PRWORA was seen as another logical step toward the
devolution of welfare policy authority from Washington. Indeed, many states
that have submitted new welfare reform plans under PRWORA propose to con-
tinue the programs and policies they initiated with these waivers.
Whether PRWORA actually results in greater autonomy and flexibility at
the state and local levels remains to be seen. It may actually diminish local
flexibility in at least two ways. First, it imposes a whole set of expectations and
mandates on states, including time limits on federal benefits, restrictions on
federal benefits for teen parents, and penalties if states do not achieve enhanced
work objectives for recipients. Second, PRWORA increases the fiscal risk of
innovation on the part of states by making states responsible for all expenditures
above a fixed federal contribution. In effect, this increases the marginal price to
states of investing in disadvantaged families with children, thereby discouraging
states from investing in areas with uncertain returns.
There are important concerns about how states will respond to these policy
changes. With the increase in fiscal risks associated with state and local policy,
do states have sufficient research evidence from the reforms begun under Section
1115 waiver demonstrations to assume additional responsibility for the design
and operation of welfare policy? As described in more detail below, despite the
extent of policy innovation and related evaluations over the past decade, we have
but modest hard evidence to guide states in many of the important decisions they
face as they assume the lead role in providing a social safety net for their poor.
The nature of the waiver demonstration programs changed over the years.
As the number of demonstrations expanded, the focus of reform initiatives also
shifted. The early waiver reforms were directed primarily at enhancing the labor
supply of AFDC adult caretakers through work-related policies and programs.
More recently, other recipient behaviors have emerged as the focus of attention,
including personal decisions about marriage and cohabitation, decisions affecting
family stability (for example, divorce and other family composition changes),
fertility decisions, and the quality of parenting. Reform activity increasingly was
directed toward what were termed "strategies to promote responsible behav-
ior" in effect, a new strain of social engineering using welfare policies and rules
to encourage socially desirable behaviors.
In theory, then, the explosion of waiver-based demonstrations, accompanied
by federally mandated rigorous evaluations, promised a wealth of information by
which states might make decisions in a postfederal world. This chapter examines
those state waiver demonstrations that were designed specifically to influence
fertility, family formation, and family maintenance behaviors. It seeks to identify
what useful lessons were generated to guide states in their design of welfare
programs under TANF. We then reflect on how one might better capitalize on the
opportunities for knowledge development presented to us by the massive natural
experiment that encompasses both the state welfare reform demonstrations of
recent years and those reforms now being implemented under PRWORA.
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136 CHANGING F~YFO~TIONBE~VIOR THROUGH WELFARE AFOUL
MOTIVATION FOR REFORM
The recent welfare reform debate that led to the shift from AFDC to TANF
was framed by several premises. First, it was widely accepted that AFDC was
seriously flawed and required radical repair. Both welfare dependency and child
poverty had reached record levels and AFDC was regarded by many state and
federal officials as worsening these problems. AFDC caseloads exceeded the 5
million mark in 1994 for the first time, an increase of almost one-third in 5 years.
Meanwhile, child poverty rates also increased from 19.6 percent in 1989 to 21.8
percent in 1994.2
Second, it was assumed that the era of "solutions from the center" was over
and that the future of welfare innovation should and would derive largely from
state and local initiatives. Public officials at all levels, as well as the public itself,
argued for devolution of authority over welfare policy from the federal govern-
ment to state and local governments, which presumably could craft solutions
sensitive to the particular needs of the client population and in accord with local
conditions and labor markets.
Third, there was growing acceptance that reforms should redirect the goals
of welfare policy from fairly straightforward objectives, such as reducing income
poverty or increasing the labor market participation of adults in welfare families,
toward more complex objectives involving fundamental changes in individual
and community behaviors. This change in attitude was affected, in part, by the
observations that 89 percent of children on AFDC lived in households with no
father present; that the out-of-wedlock birth rate more than tripled after 1960; and
that half of children in never-married households and over three-fourths of chil-
dren born to teenage mothers ended up on welfare. Finally, it has been assumed
that states are the ideal laboratories of reform and, through experimentation, will
promote both more effective welfare policies and improved knowledge about
effective design, implementation, and management of these policies.
Arguably, however, the dominant motivation for reform was the growing
perception that welfare, especially AFDC, promoted irresponsible and/or self-
destructive behaviors. Historically, welfare has embodied work disincentives,
issuing the largest benefits to those who do not work and reducing benefits as
earnings rise, sometimes drastically, among those recipients who do work. The
result has been marginal tax rates, "notch" effects, and penalties for savings that
are greater than those imposed on other income classes. A second argument was
that welfare discourages marriage by making it easier for single-parent families
than for two-parent families to receive benefits and by treating earnings among
single-parent families more generously in calculating welfare benefits. A third
2Since 1994 there has been a decline in both national AFDC caseloads and child poverty. At the
time the welfare reform debate was fully engaged, however, it appeared we had the worst of possible
worlds worsening welfare dependency and rising rates of child poverty (U.S. House of Repre-
sentatives, 1996b).
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REBECCA MAYNARD ET AL.
137
notion is that welfare lowers the cost of childbearing among poor women and
thus may encourage more childbearing among welfare recipients and teenagers
than otherwise would be the case.3 Finally it is argued that welfare creates
incentives for noncustodial parents not to report their child support payments or
to avoid their child support responsibilities, since all but a modest amount of
child support payments were used to offset AFDC benefits rather than to increase
support of the children.
Policy makers and analysts began focusing on incentive issues in the 1960s,
when they set up the various negative income tax experiments. However, it was
not until the waiver authority vested in the Secretary of the federal Department of
Health and Human Services (DHHS) was liberalized in the 1980s that states
began to explore, on a large scale and systematically, alternatives for responding
to these issues. Table 6-1 classifies waivers into several major types. As the last
column of Table 6-1 shows, by August 1996, 42 states had applied for one or
more waivers of federal welfare regulations and the federal government had
approved 452 separate state waivers of welfare policies. Column 1 of Table 6-1
shows that 33 states had received waivers of 46 provisions related to the eligibil-
ity criteria for unemployed parents. As we move across the top of the table, we
see that 40 states had waivers that changed more than 150 provisions related to
ongoing program participation requirements. Thirty-seven states had waivers
changing 142 provisions related to benefits and services. And 37 states had
waivers changing 107 provisions related to the treatment of earnings and assets in
the calculation of benefits.
As the pace of waiver requests increased in the 1990s, so too did the com-
plexity of the proposed policy changes. Many of the more recent waiver requests
reflected substantial "borrowing" of ideas from other states and jurisdictions and
"bundling" of policy changes to form complex and sometimes radically different
welfare policies. Over time, state reforms became increasingly ambitious and
were more likely to encompass multiple goals: promoting labor supply, encour-
aging family formation and stability, encouraging school attendance, mandating
immunization of children, altering fertility decisions, and promoting improved
parenting. So too, more reforms focused on target populations other than the
adult caretaker children in the assistance group, minor teenage parents receiv-
ing assistance, immigrant beneficiaries, and nonresident fathers of recipient chil-
dren. Many reforms included multiple strategies for achieving these various
goals: testing a variety of behavioral incentives for various household members
and, in some cases, nonresident parents; testing incentives for employers to hire
recipients; and testing incentives designed to alter welfare agency cultures. There
3some have even argued that many teens may have babies just to get welfare and be able to set up
independent homes. so too, some have argued that many welfare mothers have additional children
in order to increase their grants. The research base fails to support these claims (see further discus-
sion below).
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138 CHANGING F~YFO~TIONBE~VIOR THROUGH WELFARE AFOUL
TABLE 6-1 Number of Waivers of Federal Welfare Policies as of August
1996, by Type and State
Number of Different Waiver Provisions Related To
Eligibility Ongoing Welfare Benefits Income
for Participation and and Asset
Benefits Requirements Services Disregards Total
States with Provision 3340373742
Total Provisions 46157142107452
Arizona 11316
Arkansas 01102
California 128516
Colorado 01124
Connecticut 216312
Delaware 155314
Florida 234514
Georgia 134210
Hawaii 20103
Illinois 062210
Indiana 254314
Iowa 057315
Kansas 343414
Louisiana 03104
Maine 05319
Maryland 175417
Massachusetts 165315
Michigan 15039
Minnesota 21238
Mississippi 135110
Missouri 142411
Montana 233311
Nebraska 134414
New Hampshire 253414
New York 03205
North Carolina 164213
North Dakota 11002
Ohio 155314
Oklahoma 12418
Oregon 234312
Pennsylvania 296623
South Carolina 195722
South Dakota 11114
Tennessee 174517
Texas 173213
Utah 22228
Vermont 11215
Virginia 175215
Washington 02136
West Virginia 1 427
Wisconsin 276318
Wyoming 03216
SOURCES: U.S. Department of Health and Human Services, Administration for Children and
Families (various years). See also U.S. Department of Health and Human Services (1997).
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REBECCA MAYNARD ET AL.
139
also was substantial variation in the focus of the various state welfare demonstra-
tions and in the particulars of the individual initiatives.4
Some common themes do, however, appear in the waivers. As Table 6-2
shows, the most common waiver provisions of the majority of approved demon-
strations fall within four categories of change: (1) eligibility of two-parent fami-
lies, 34 states; (2) welfare participation requirements, 40 states; (3) benefits and
services, 37 states; and (4) income and assets disregards, 37 states.
With regard to the eligibility of two-parent families for benefits, 34 states
eliminated the 100-hour work rule (discussed below) and 25 states expanded
eligibility for unemployed parents; 40 states required ongoing work participation
of some form, including mandatory participation in work-related activities (36
states) and financial incentives and sanctions imposed depending on work par-
ticipation (30 states). Many states (37) made changes in their benefit structure
and services: 25 states obtained waivers designed explicitly to impose time limits
on benefits, while 22 states chose to expand transitional child care and Medicaid
programs to ease the financial burden of moving from welfare to work. Waivers
were obtained by 21 states to impose family caps on benefits to discourage (or at
least not reward) childbearing among welfare recipients. Many states obtained
waivers to liberalize their policies regarding the use of income and assets in the
calculation of welfare benefits. Some increased the value of an automobile (26)
or other assets (23) individuals could own and still receive public assistance, and
some increased the amount of earned income that is disregarded in computing
benefit amounts (25~.
FAMILY STRUCTURE AS THE FOCUS OF REFORM
State waiver demonstrations systematically explored remedies for the per-
ceived adverse behavioral consequences associated with AFDC. Other than
improving labor market attachment, nowhere has this search been more vigorous
than in the area of family structure. Moreover, while PRWORA changes myriad
aspects of the economic and social safety net, the provisions related to family
structure have been especially important in the political debate over the reforms.
Two specific areas have attracted the greatest public attention in the welfare
reform discussions, in large part because of their anticipated links to behavioral
consequences that could change the future of poverty and welfare policy family
caps (also termed child exclusion provisions) and the unemployed parent (UP, or
two-parent family) provisions.
Family caps, the policy of not adjusting cash assistance benefits when AFDC
recipients have additional children, reflect a relatively new and, to many, radical
4Considerable variability prevailed in the number and mix of provisions implemented in states
(and sometimes within local areas). For instance, although many states requested waivers to make
changes in the benefit eligibility rules for two-parent (or unemployed-parent) families, only two of
those provisions were present in waivers granted to large numbers of states (see Table 6-2).
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140 CHANGING FAMILY FORMATION BEHAVIOR THROUGH WELFARE REFORM
TABLE 6-2 Common Provisions of State Welfare Waiver Demonstrations:
1986-August 1996
Provision
Number
of States
Eligibility of Two-Parent Families for Benefits
Elimination of 100-hour work rule
Expanded eligibility for unemployed parents
Ongoing Welfare Participation Requirements
Mandatory participation in work-related activities
Financial incentives and sanctions
Financial sanctions
Financial incentives
School attendance and/or performance for children and/or teenage parents
Children must receive appropriate immunizations and health services
Teenage parents must live at home or in supervised settings
Recipients must cooperate with child support enforcement
Participants must have self-sufficiency plans
Changes in Benefits and Services
Time limits on benefits
Expansions in transitional child care and Medicaid
Caps on benefits based on initial family size (family caps)
Cash-out of food stamp benefits
JOBS' services for noncustodial parents
Increases in the child support pass-through
Changes in Income and Asset Disregards
Increases in limit on value of an automobile
Increases in resource limits
Increases in earnings disregard
Expansions in disregards for college assistance, work study, or student earnings
34
34
25
40
36
30
28
5
25
19
17
13
13
37
25
22
21
13
12
10
37
26
23
25
13
NOTE: This table includes only provisions found in 10 or more state waivers.
SOURCE: U.S. Department of Health and Human Services, Administration for Children and Fam
lies (various years). See also U.S. Department of Health and Human Services (1997).
change in welfare policy. New Jersey was the first state to implement family
caps, doing so on an experimental basis in 1992. In contrast, virtually all states
had AFDC-UP programs as of July 1990, although UP recipients remained only
a small portion of the AFDC caseload. Between 1961, when federal legislation
allowed states to offer AFDC to two-parent families, and 1988, when the Family
Support Act mandated that all states offer AFDC coverage to poor, two-parent
families in which one worker had a recent work history, only about half of the
states voluntarily enacted AFDC-UP programs. Less than 10 percent of the total
AFDC caseload represented UP families. Recent reforms related to family caps
and the unemployed parent policies share programmatic goals with PRWORA
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REBECCA MAYNARD ET AL.
141
and are of special interest to states as they design and implement their TANF
reforms.5
Family Cap Rules
Generally the family cap provisions under the waivers in effect at the time
PRWORA was passed contained the stipulation that an AFDC family would not
receive additional cash assistance for those children born while the family was
receiving AFDC benefits. Under PRWORA, states have the option of imposing
family caps, but are not required to do so.
By the time PRWORA passed, 21 states had obtained federally approved
waivers containing family cap provisions (Table 6-3~. States were given the
flexibility to modify existing waiver terms and conditions under PRWORA,
though many chose not to do so, at least in the short run.
The New Jersey family cap, implemented in 1992 as a provision of the
state's Family Development Program, has been the most widely publicized such
provision and became somewhat of a model for other states. Under it, AFDC
families received no assistance for a child born more than 10 months after AFDC
application (there also was a 10-month grace period for current recipients), with
three exceptions: (1) the first child of a minor already included in an AFDC grant;
(2) families who left AFDC due to earnings, remained employed for 90 days,
then terminated employment for good cause; and (3) families who left AFDC for
any reason and remained off welfare for 12 consecutive months. New Jersey also
offered an additional earned income disregard for employed mothers with infants
who are subject to the cap, allowing them to keep more of their earnings.
Family cap initiatives were characterized by two features during the pre-
PRWORA period. First, as in New Jersey, the "typical" family cap provision was
not initiated as a stand-alone provision, but was embedded within larger, more
complex welfare reform initiatives.6 Seventeen of the twenty-one states with
family caps overlap with states that obtained waivers altering their two-parent
family provisions (see further below). Second, there existed considerable varia
5There are additional waiver provisions and goals in PRWORA that may also have an affect on
family formation (such as requiring minor parents to live with an adult). However, this chapter limits
its focus to the family cap and the two-parent family provisions.
6For example, the New Jersey Family Development Program includes expanded employment,
education, and training services; provisions reducing the marriage penalties; and modifications to
earnings disregards. The Virginia Independence Program (VIP) contains a family cap provision as
well as provisions for time limits, earnings subsidies, modifications to income disregards, changes in
Jobs sanctions and exemptions, and links between benefits and school attendance. North Carolinas
Work First demonstration includes a family cap as well as benefit time limits, modifications to
income disregards, elimination of the 1 00-hour rule, and changes in Jobs sanctions and exemptions
(u.s. Department of Health and Human services, various dates, and u.s. Department of Health and
Human services, 1997).
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142 CHANGING F~YFO~TIONBE~VIOR THROUGH WELFARE ~FO~
TABLE 6-3 Key Features of Family Cap Provisions of State Waiver Demonstrations:
1986-August 1996
Liberalize
Treatment
Time Limit of Earninl
DateDate Exclusion and Child
State and Program NameApprovedImplemented Statewide (months) Support
Number of states with
21 19 20 8
provision
AZ-(EMPOWER) Employing5/95ll/95 X 10 X
and Moving People Off
Welfare and Encouraging
Responsibility
AR AFDC-M4/947/94 10
CA (WPDP) Work Pays3/944/94 X 10 X
Demonstration Project
(CWPDP-M) Work Pays8/968/96 X 24
Demonstraton Project
Modified
CT Reach Jobs 1st12/9512/95 X 10
DE BETTER CHANCE5/9510/95 X 10
FL Family Responsibility Act6/966/96d X 10
GA Personal Accountability11/931/94 X 24
and Responsibility Act
IL Work and Responsibility9/959/95d X 10
IN IMPACT12/945/95 X 10
IMPACT M8/968/96d X
KS Actively Creating8/968/96 X 10
Tomorrow
MD Family Investment8/9510/95 X 10
Program
MA Transitional AFDC8/9511/95 X 10
Program (Welfare
Reform '95)
MS New Direction
Modifications
8/95 11/95 X 10
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REBECCA MAYNARD ET AL.
remonstrations:
143
Liberalized
Time Limit
Exclusion
(months)
Treatment
of Earnings
and Child
Support
Exemptions
Benefits
Vary by
Number of
Childrena
Conceived
During
Birth to Residence Period of
Incest/Rape Minorb RequirementC No Benefits
20 8 3 14 8 5 6
10 X X X
10 X X
10 X X
24
10
10
10
24
10
10
10
10
10
10
X
X
X
X
X X
X
X
X
X
X
X X
X X
X X
X
X
X
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144 CHANGING F~YFO~TIONBE~VIOR THROUGH WELFARE ~FO~
TABLE 6-3 Continued
Liberalize
Treatment
Time Limit of Earning
Date Date Exclusion and Child
State and Program Name Approved Implemented Statewide (months) Support
NE Welfare Reform 2/95 10/95 X 10 X
Demonstration Project
NJ Family Development 7/92 10/92 X 10 X
Program
NC WORK First 2/96 2/96d X 10
OK Mutual Agreement 3/95 3/950
SC Family Independence 3/96 3/96d X 10
Program (FIP)
TN Families First 7/96 7/96d X 10
VA Virginia Independence 7/95 7/95 X 10 X
Program (VIP)
WI Parental And Family 4/92 7/94 10
Act (PFR)e
Work Not Welfare 11/93 1/95 10
AFDC Benefit Cap 6/94 11/96 X 10
Demonstration Project
(ABC)f
NOTE: Twenty-one states have implemented a total of 25 demonstrations that include a family cap
provision. In addition, three states, New Hampshire, Texas, and Wyoming require parents to partici-
pate in JOBS activities sooner after giving birth to a child conceived while on cash assistance, but
continue to increase the cash grant (U.S. Department of Health and Human Services, 1997: Table
III).
aPercentage of benefits changes as number of children increases.
bThese provisions exempt first-born minors already receiving benefits.
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166 CHANGING F~YFO~TIONBE~VIOR THROUGH WELFARE AFOUL
EVALUATING THE GREAT SOCIAL EXPERIMENT
The next generation of welfare reforms could well have its largest effects by
changing social norms particularly by increasing the social stigma attached to
childbearing out of wedlock and to childbearing among those unable to support
their children or already dependent on welfare. From the parochial perspective of
the states implementing the reforms, there is little reason to look beyond whether
welfare rolls decline and fewer children are being reared out of wedlock. A
broader social view, however, argues for adopting a more comprehensive and
longer-range research and evaluation plan involving multiple goals and assess-
ment strategies.
Ideally, the next wave of research on welfare reform will support the ability
of states to simulate the likely response of target populations to various model
welfare policies. In that ideal world, New Hampshire, as an example, would be
able to simulate the change in caseloads and in the economic welfare of its low-
income population that might be expected from continuing current policies, and
to contrast these outcomes with what might happen if the state were to adopt
policies more like those in Massachusetts or in Maine. And it would be able to
conduct its simulations under alternative assumptions about the direction of its
economy and demographic trends. Such simulations will result in a better under-
standing than we now have of why the expected results will occur.
At the same time, the next wave of research needs to look inside the "black
box" of change much more carefully than have past studies. The reforms that are
about to occur under PRWORA are simply too major in scope to assume there
will be only marginal implications for family and child well-being. Meeting this
objective suggests that the future research agenda related to welfare policy should
address multiple, overlapping goals: (1) meet local program, policy monitoring,
and assessment needs; (2) enhance basic knowledge of behavioral responses to
various policies; (3) promote our understanding of contextual influences on hu-
man behavior; and (4) strengthen our understanding of program and policy out-
comes. The first of these goals is best addressed through research such as that of
the waiver demonstration evaluation projects. These projects can inform the
remaining goals, but they fall far short of providing generalizable findings. For
these, we need both to capitalize on the ongoing national experiment we are
witnessing and to conduct some carefully planned subexperiments within this
natural experiment.
State governors and legislatures, as well as local service deliverers, will need
local monitoring and assessment strategies to address their own requirements for
accountability and feedback. In order to meet these requirements, states should
gather and analyze their program outcome measures on a regular basis, making
certain those data are accurate and not subject to the types of reporting errors or
delays that have plagued many of the waiver demonstration evaluations, such as
the early assessments of New Jersey's family cap policy. States should pay close
OCR for page 167
REBECCA MAYNARD ET AL.
167
attention to defining the relevant population. For example, they should consider
whether they need to track the rate and characteristics of case openings and
closings as well as monitor the activities of the ongoing caseload.
Additionally, monitoring efforts should factor in demographic and contex-
tual shifts. Economic change is demonstrably linked to welfare caseloads;
changes in local labor market conditions can alter the likelihood that resident
fathers will increase their hours of work and/or even find employment that will
move them off welfare. Such conditions should be included in any monitoring of
the consequences of suspending the 100-hour rule. Likewise, significant changes
in the availability of family planning services are known to affect both fertility
and pregnancy resolutions among low-income women, and these factors, not
welfare policy changes, could drive apparent shifts in fertility outcomes among
the welfare population.
Predicting Behavioral Responses to Welfare Policies
In the context of the broader mission of supporting extensive simulation
results by states, research needs to focus more on the behavioral responses of
individuals to specific welfare parameters. We need to know the expected
change in the out-of-wedlock birth rate associated with particular income
changes and needs resulting from an increase in family size. It also is important
to know how marriage rates change as we vary the probability that individuals
will be eligible for welfare and, conditional on their being eligible, vary their
expected benefits. In both of these examples, we need to take into account the
initial characteristics of the individual and other contextual factors. The change
in the out-of-wedlock birth rate associated with various benefit increments likely
will differ by the number of children one has already, the baseline benefit level
(including whether the person is on welfare at all), and other social circum-
stances.
The particulars of the policy parameters that states have already changed or
will modify under TANF are less important in themselves than are the conse-
quences of these changes in terms of welfare eligibility and expected benefit
levels for current and prospective welfare recipients. In general, the decisions of
current and prospective recipients regarding future employment, family forma-
tion, child support, and childbearing are going to be determined less by the
policies and policy language than by what actually happens to their family's
welfare eligibility status and benefit levels if they make particular choices such as
the choice to have another child, to marry the father of their child, to get a job, to
cooperate with child support, or to get divorced.
Still, the specific formulation of certain policies itself may send important
messages to the public regarding expectations and values, which could affect
behavior. A prime example in which the message may be as powerful, or more
powerful, than the financial consequences of the policy is the family cap. Family
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168 CHANGING FAMILY FORMATION BEHAVIOR THROUGH WELFARE REFORM
caps send a very clear message that taxpayers look down upon out-of-wedlock
childbearing, especially if parents are unable to support their children.
The wave of welfare reforms offers an unparalleled opportunity to learn
about behavioral responses to income incentives, economic uncertainty, and so-
cial support opportunities. We also can estimate the independent effect, if any, of
the manner in which the economic consequences and support opportunities are
packaged. For example, imagine that we collect and analyze longitudinal data on
decisions that poor or near-poor people make and their consequences in terms of
program eligibility and benefits for each welfare jurisdiction and for each year
from 1992, when the flurry of welfare reform activity began, through the next 5
years. We could gather such information from a micro-level review of welfare
applications and case records.~3
That is, we could sample records from the welfare files for all those years in
all 50 states and in some counties and construct a database that includes, for each
case: (1) basic information, such as number of children, age of youngest child,
marital status, employment status, time on welfare, child support status, area of
residence, age, and race/ethnicity; (2) status changes, if any, reflecting major
behavioral decisions (for example, the birth of another child, a marriage or di-
vorce, the acquisition or loss of a job, and increasing or decreasing hours of
employment); and (3) for those with a status change, the impact of this on their
welfare eligibility and benefit levels. The resulting database will allow us to
create measures of the expected welfare response a person in situation "X" might
face if he or she makes particular decisions regarding family formation and
status.
Once we have the hypothetical consequences for welfare eligibility and ben-
efits of various behavioral choices that people make, we can use these data in
statistical models designed to measure the strength of the behavioral response by
current and prospective welfare recipients to particular welfare policy environ-
ments. For example, we can estimate the impact of a particular benefit change
(such as the introduction of a family cap) on fertility decisions of individuals with
particular baseline characteristics and facing a particular policy context prior to
the change. In essence, however, we would translate the family cap into particu-
lar eligibility and benefit changes associated with fertility decisions that would
result in the particular site and for particular individuals. Similarly, we could
estimate the impact of a particular marriage penalty or reward on the likelihood of
marriage, given the prevailing baseline context.
Alternatively, we could simply gather welfare rules governing eligibility and benefit changes for
individuals in various statuses and create rules-driven predictors of the policy response to behavioral
choices facing individuals. Or we could survey a representative sample of low-income families and
gather data on their reports of system responses to their behavioral changes. This has the problems of
introducing recall and reporting bias and of being relatively costly.
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REBECCA MAYNARD ET AL.
169
Assuming we have sufficient variation from our natural experimental data-
base, we should be able to generalize the results of particular policy shifts to
other settings.l4 We could also incorporate into these behavioral models mea-
sures of possible "message" effects (for example, the effects of a family cap
policy beyond its effect on the marginal benefit level associated with a decision
to have another child). Doing this would require gathering data for analysis on
the understanding and beliefs of poor and near-poor families as well as service
deliverers.
Contextual and Ethnographic Analysis
Now more than ever, it is critical that trained social scientists conduct sys-
tematic, in-depth evaluations to further our understanding of the economic and
social welfare of highly at-risk families; of the behavioral choices these families
face and the decisions they make; and of the family, community, and social
services they draw on to meet the challenges faced by those living near or in
poverty. The most optimistic world under welfare Revolution is likely to be one
in which state and local welfare reforms succeed in trimming the welfare rolls by
providing greater incentives for those with the greatest social capital and familial
support to eschew welfare. It also will undoubtedly fail to meet the income
security needs of a portion of the current and prospective recipient pool who
simply enter parenthood and/or adulthood without the social capital to escape
poverty through their own labor or that of their partners. Even with strong
employment support interventions, some poor families will hit the time limits and
will risk taking their families to homeless shelters or the streets.
The unfolding social experiment in welfare policy will enable us to identify
and learn from these two very important subgroups of the poverty population. If
we plan carefully, we can estimate the number and characteristics of those falling
into each category. But, more important, we also could learn an enormous
amount about the factors that contribute to family resilience under a "tougher"
world vis a vis social welfare policy, and why some families need much more
than offered by either the past welfare system or that which emerges under
TANF. The results of such in-depth studies could provide the foundation for
designing preventive and ameliorative policies directed at this the most needy
group and at moving other families more quickly through transition dependency.
One subset of such research could build on more routine longitudinal surveys
of near-poor and poor families to track their movements on and off welfare; in
and out of the labor market; through family formations and dissolutions; and
14The analytic models would operate rather like Mathematica Policy Research's STEWARD
(Simulation of Trends in Employment, Welfare, and Related Dynamics) microsimulation model
(Beebout et al., 1995).
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170 CHANGING F~YFO~TIONBE~VIOR THROUGH WELFARE ~FO~
through fertility decisions. Researchers could then carefully select families fit-
ting various profiles of special interest for example, seemingly low-resource
families who succeed under various welfare support settings, their counterparts
who "fail," and high-resource families who fail under various welfare support
options and conduct an in-depth study of a sample of such families over a
period of time to reconstruct the factors that contributed to varying degrees and in
varying combinations to the successes or failures of the families.
Another subset of this strand of research would entail intensive ethnographic
research with at-risk families.l5 The focus of these studies will be on understand-
ing the interactions among a broad set of contextual factors in determining behav-
ioral choices of families and their short- and long-run implications. Such re-
search would, for example, contribute to our understanding of the issues that poor
and near-poor families consider in deciding whether to subsist on a low-wage job
rather than apply for welfare or whether to place their child in poor-quality care in
order to avoid welfare time limits. This research could then also follow the
families to inform us of how the various decisions these families make play out
for themselves and their children.
Targeted Experimental Evaluations
Some areas of reform are so different from past policy and practice that
prudence argues for conducting targeted experimental evaluations as part of a
phased implementation plan. Despite their limitations in terms of generalizability
of findings and their inability to address systemic reform, we should not abandon
experimental evaluations. They are unquestionably the best means of judging the
efficacy of targeted interventions, particularly in cases where there is not yet
sufficient evidence to support universal implementation of the policy.
The strategies for conducting these types of evaluations are well documented,
and there are dozens of models to draw on (Bell et al., 1995; Gordon et al., 1997;
Boruch, 1997~. These types of evaluations are especially valuable in cases where
policy makers are interested in comparing the status quo with proposed new
policies or interventions designed to achieve specific improvements in outcomes.
The researchers then design an efficient experimental evaluation with the pri-
mary goal of testing the hypothesis that the new policy or intervention does have
the intended consequences. To the extent feasible, such studies should also be
accompanied by qualitative evaluations of the intervention or policy change and
in-depth studies of purposefully selected subsets of the demonstration partici-
pants for the purpose of understanding the contents of the so-called black box
and, further, of helping to understand and interpret the impact analysis findings
15We are only recently beginning to constructively integrate the results of such analyses with the
statistical research to identify behavioral models and to assess the efficacy of particular program
models (e.g., see Polit, 1992; Quint et al., 1994a, 1994b; Luker, 1996; and Herr et al., 1996).
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REBECCA MAYNARD ET AL.
171
and translate them into more general conclusions for the benefit of the broader
research and policy community.
CONCLUSION
State and local governments are being called upon to handle some of society's
most vexing and intractable social problems. The empirical evidence available to
support prudent policy making at the subfederal level is not as extensive as one
might expect, given the amount of recent demonstration and evaluation activity.
The basic research needed to guide future policy improvement entails ag-
gressive study of the innovation and experimentation associated with PRWORA.
We should be proactive in addressing evaluation issues and challenges. Surpns-
ingly little was learned about how past welfare reforms have affected those be-
haviors considered most important to the current reforms. We must learn from
that history and do a better job of exploiting the knowledge development oppor-
tunities arising from the devolution of responsibility for welfare from the federal
government to the states and even to local governments. Whatever social and
economic challenges PRWORA creates, it also opens up an enormous opportu-
nity to study behavioral responses to quite major shifts in the incentives created
by venous types of welfare policies.
ACKNOWLEDGMENTS
The authors are most appreciative of comments provided by Isabel V. Sawhill
on the conference version of the paper and of comments provided by Robert
Moffitt and two anonymous referees on an interim draft.
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176 CHANGING FAMILY FORMATION BEHAVIOR THROUGH WELFARE REFORM
APPENDIX 6A Sources of Data on Impacts of Welfare-Related
Demonstrations on Fertility Behavior of Teenage Parents
Program
Source(s) of Information on the Research Findings
Job Start Cave, G., H. Bos, F. Doolittle, and C. Toussaint. October. "JOB
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Bloom, D., V. Fellerath, D. Long, and R. Wood. "LEAP: Interim
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pregnancies among welfare-dependent teenage mothers." Family
Planning Perspectives Vol. 26(5): 198-205.
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Care Program program for first-time adolescent mothers and their infants." Nursing
Research Vol. 41(4):210-215.
Elmira Nurse Home Olds, D., C.S. Henderson, R. Tatelbaum, and R. Chamberlin.
Visiting Program "Improving the life-course development of socially disadvantaged
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Representative terms from entire chapter:
family cap
