Has ‘Welfare Dependency’ Increased?

Abstract

This paper uses the Panel Study of Income Dynamics from 1975 to 1992 to measure changes in the distribution of years of receipt of AFDC. The process generating the total number of years of welfare receipt is then disaggregated into four components: (1) the length of time until first birth, (2) the duration until a welfare spell begins, (3) the duration of a welfare spell, and (4) the duration until the woman re-enters the welfare system. Since much of the recent debate has focused on unwed teen mothers, we give special attention to this group. Finally, we focus on events that accompanied the end of welfare spells. We find no systematic evidence of increased dependency, either for all women or for women who had their first child as unwed teens. The stability of the overall measures of total time on welfare, however, reflects offsetting changes in the underlying processes. For example, the duration until first birth declined but there was no trend in the time between first birth and entry onto welfare. This holds for unwed teens as well as other women. Furthermore, we find that the duration of welfare spells declined for unwed teens but increased for others. Changes in events associated with entry onto welfare and exits from welfare also do not support the view that welfare recipients were less likely to use the labor market to change their welfare status.