Determinants of AFDC Caseload Growth. 1. Demographic Factors

07/01/1997

All the models of AFDC caseload growth we reviewed include a number of demographic explanatory variables, the most common being the size of the population of female-headed households; however, a number of studies have simply used total population or total female population measures. Other commonly used variables are births (out-of-wedlock, in-wedlock, or fertility rates), and the number of divorces (Exhibit 2.2).

Several issues arise in considering which demographic variables to include in a model of AFDC caseload growth. First, should overall population measures be used or population measures that also incorporate family structure (e.g., total female population ages 15 to 45 versus the number of female-headed households)? Because economic factors are likely to determine family structure and therefore, their importance may be understated in models that use family structure as an explanatory variable.

Second, there is an issue surrounding the changing age distribution of the female population. As the population ages, presumably the propensity to participate in the AFDC program among female-headed households also changes. None of the studies we reviewed addressed the changing age distribution of the population or the potential impact on AFDC caseloads.

Third, there is the issue of stock versus flow measures when using births, marriages, or divorces as explanatory variables. Births, marriages, and divorces all are flow variables that each have marginal impacts on the size of the population at risk for AFDC participation (single mothers). Such variables would be appropriate for models that focus on openings and closings because these, too, are flow variables, but are inappropriate for modeling the size of the caseload directly. For the latter, explanatory variables reflecting the stock of individuals at risk for AFDC participation seem more appropriate.

Fourth, while detailed family structure data are available from surveys at the national level, they are not generally available at the state level. One pooled model (Grossman, 1985) used a national series for female-headed households in the equation for each state, allowing the coefficient to vary across states. Two state models, for Maryland and Texas, use monthly state female-headed household series. In the case of Maryland, however this series is interpolated between Census observations. We have not received information on how the series for Texas was constructed, but note that Texas is large enough so that estimates based on the Current Population Survey would be reasonably accurate.

Exhibit 2.2

Demographic Variables used in Previous Analyses of AFDC Caseload Growth

Variable Type Description Model(s)
State Population Quarterly, state Total state population; quarterly data interpolated from annual data Cromwell et al. (1986); Barnow (1988)
  Quarterly, state State Population, ages 15-44 Garasky (1990)
Female Population Quarterly, state Female Population, ages 15-45 Florida
  Monthly, state Female Population, ages 15-44 Oregon, AFDC-Basic model
Female Headed Households Quarterly, national Number of families headed by women with own children under 18 multiplied by ratio of never married mothers to mothers who have been married CBO(July 1993), AFDC-Basic model
  Quarterly, national Number of female headed households Grossman(1985), AFDC-Basic model.
  Monthly, state Number of never-married female headed households with children under 18 Texas
  Monthly,

state

Number of separated/divorced female headed households with children under 18 Texas
  Monthly, state Number of female headed households with children under age 18; data interpolated from 1980 and 1990 data using the Maryland Demographic Model Maryland, Balance of state AFDC-Basic model
Unmarried mothers Annual, state Log of proportion of recipient households for whom the mother of the youngest child is not married Shroder (1995), benefit model only.
Births Quarterly, state Sum of out-of-wedlock births over previous two years Barnow (1988)
  Quarterly, state Number of live births to all mothers aged 15 through 19 (lagged one quarter) Garasky (1990)
  Monthly, state Fertility rate of unwed women, ages 15-44 Oregon, AFDC-Basic model
  Monthly, state Number of births Oregon, AFDC-Basic model
  Monthly, state Number of out-of-wedlock births Minnesota (AFDC-Basic Model)
  Monthly, state Number of in-wedlock births Minnesota (AFDC-UP Model)
  Monthly, state Out-of-wedlock birth rate Washington, AFDC-Basic entry equation
Number of Children under Age 18 Annual, individual Number of children under Age 18 of female household heads Moffitt (1986)
Divorces Quarterly, state Number of divorces Barnow (1988)
  Monthly, state Number of divorces Oregon, AFDC-Basic model
Marital Status of Mother-Only Families Annual, national Decomposition into never married, separated/other, divorced, and widowed categories Gabe(1992)
Living Arrangements of Mother-Only Families Annual, national Decomposition into independent families, extended families, cohabitation, and unrelated families categories Gabe (1992)
Size of Labor Force in States with UP Programs Quarterly, national   Grossman(1985), AFDC-UP model
State's Own F/EM Ratio Annual, state Log of ratio of women age 15-65 to employed men in state Shroder (1995), recipiency model.
State's "Composite Neighbor's" F/EM Ratio Annual, state Log of ratio of women age 15-65 to employed men in state's "composite neighbor" Shroder (1995), recipiency model.
Anglo Recipients Annual, state Log of proportion of AFDC household heads who are non-Hispanic whites Shroder (1995), benefit model.