Welfare Reform: The Effect of Family Caps on Higher-Order Births

Abstract

In the 1990’s some states began to implement a policy known as the family cap. Before the implementation of family caps, all states would increase a welfare recipient’s benefit level when they bore an additional child. Some political leaders began to worry that this marginal increase in benefits increased higher-order births among welfare recipients. Note that higher-order births are any birth after a women’s first child. Under a full family cap, a mother on welfare no longer gets increased monetary benefits if she bears an additional child. In this paper I take two approaches to seeing how higher-order births have been affected by the family cap. First, I use state level natality and population data from 1989-2004 to see if the overall higher-order birth rate decreased because of the family cap. Second, I use current population survey data from 1989-2011to look specifically at welfare recipients and see how the family cap affected recipients’ probability of a higher-order birth. I find that monthly higher order-birth rates are decreased by 1.58% from the implementation of a family cap. There is also some evidence that the probability of higher-order births to welfare recipients is reduced by a family cap.