This research examines race-specific fertility impact of a particular form of incremental change in welfare benefit levels implemented in New Jersey, called the family cap. The family cap policy precludes an AFDC recipient from receiving additional cash benefits for a child that she conceived while on welfare. The policy's impact on the births, abortions and related fertility behavior of white, black and Hispanic AFDC women are studied through the use of two different research methodologies: (1) a classical experimental design and (2) a quasi-experimental, pre-post design. In addition, the role of 'proximate culture' as a moderator of economic (dis)incentives is explored.
The experimental design study uses a sample of nearly 8,400 AFDC recipients randomly assigned to an experimental and a control group. Using data from the welfare and Medicaid administrative data systems, the study shows that the impact of the family cap varied substantially across the three racial groups. Whites were virtually unaffected by the cap. Black recipients in the experimental group reacted to the cap by lowering their birth rates and increasing their use of abortion and other family planning services relative to the black control group members. Hispanic women in the experimental group showed a substantial increase in their abortion rate and contraception prescription rates, compared to members of the control group. The study also shows that the impact of the cap on the birth decisions of blacks and Hispanics is significant only when they lived in a community that is not predominated by members of their own racial group, suggesting that the proximate culture in the community of residence serves to moderate the policy's impact.
The pre-post study uses the same data sources and examines similar outcomes as the experimental-control study, but considers the entire AFDC caseload from New Jersey's ten largest welfare counties. Results from this study are in complete agreement with the findings of the experimental-control study with respect to the direction of the family cap impact overall, and for whites and blacks, but not for Hispanics. Magnitude of the family cap impact across the two studies, however, differs substantially.
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