The purpose of this paper is to present a model which was developed
to forecast Aid to Families with Dependent Children (AFDC) caseloads
and payments in Delaware. The model consists of a caseload equation. a
payments equation. and three labor market equations. The model. which
was fitted statistically using quarterly data for the period 1958-1976,
forecasts significantly better than trend type models. In addition , the
model, unlike trend type models has the potential for forecasting turning
points and can be used to simulate the impact of proposed policy
changes
