Does welfare cause increases in female-headed households?

Abstract

Public discourse in the United States has become increasingly dominated by debates over the impact of welfare expenditures on specific demographic groups. Of particular concern is the potential impact of welfare expenditures on the formation of female-headed households. Applying Granger causality to time series data on expenditures on Aid To Families with Dependent Children (AFDC) and the proportion of families headed by females, the authors examine whether increases in AFDC expenditures causes a rise in the number of female-headed households. Evidence provided is inconsistent with the hypothesis that rising welfare expenditures generates an increase in the number of female-headed households. More generally, the results suggest that public policies which attempt to reduce the numbers of female-headed households via a reduction in AFDC benefits or a tightening of eligibility requirements are unlikely to be successful.