Has Welfare Reform Changed Teenage Behaviors?

Working Paper: NBER ID: w8932

Authors: Robert Kaestner; June O'Neill

Abstract: We use data from the National Longitudinal Surveys of Youth 1979 and 1997 cohorts to compare welfare use, fertility rates, educational attainment, and marriage rates among teenage women in the years before and the years immediately following welfare reform. Our first objective is to document differences between these cohorts in welfare use and outcomes and behaviors correlated with 'entry' into welfare, and with future economic and social well-being. Our second objective is to investigate the causal role of welfare reform in behavioral change. We find significant differences between cohorts in welfare use and in outcomes related to welfare use. Further, difference-in-differences estimates suggest that welfare reform has been associated with reduced welfare receipt, reduced fertility, reduced marriage, and lower school drop-out among young women who, because of a disadvantaged family background, are at high risk of welfare receipt (relative to those at lower risk). Finally, in the post-welfare reform era, teenage mothers are less likely to receive welfare and are more likely to live with a spouse or to live with at least one parent than in the pre-reform era. Establishing definitively that welfare reform is responsible for these changes among teenagers will require further investigation.

Keywords: Welfare Reform; Teenage Behaviors; Educational Attainment; Fertility Rates; Marriage Rates

JEL Codes: I3

Causal Claims

Cause	Effect
welfare reform (I38)	reduced welfare receipt (I38)
welfare reform (I38)	decreased fertility rates (J13)
welfare reform (I38)	lower marriage rates (J12)
welfare reform (I38)	decline in school dropout rates (I21)
reduced welfare receipt (I38)	less likelihood of receiving welfare among teenage mothers (I39)
welfare reform (I38)	more likely to cohabit with a spouse or at least one parent (J12)