Determinants of AFDC Caseload Growth. 2. Unemployed Parent Caseload

07/01/1997

The model also provides important insights concerning past cycles in the UP caseload:

  • While labor market factors fall short of explaining all of the large caseload growth observed during the two major recessions of this period, they do explain much of it -- especially for the 1990-91 recession.
  • The estimated impact of the OBRA81 cuts on the UP caseload is proportionately as large as the impact on the Basic caseload, even though the national UP caseload continued to rise after OBRA81 was implemented. The continued rise in the UP caseload is largely explained by the recession.
  • As with the Basic caseload, we found that the influence of population growth and aging declined substantially over the period.
  • We could not find any measurable impact of legalizations under the Immigration Reform and Control Act of 1986 on the UP caseload, which may be because most child-only cases are in the Basic program. Note, however, that when we re-estimated the model using a method that gave more weight to large states (Exhibit 5.3), along with some other specification changes, the coefficient of the IRCA variable became statistically significant. Hence, it may be inappropriate to conclude that there was no effect on the UP caseload.
  • Much of the caseload growth not accounted for by the variables in the model occurred in the first two years of the sample, both nationally and in the three states with UP programs for the entire period -- especially Wisconsin. This differs from what we found for the Basic caseload. We also found substantial growth not accounted for between 1984 and 1989, although in Maryland we found that the caseload decline in this period was greater than that predicted by the model. These patterns suggest that the unidentified factors at work may be different than those for the Basic caseload.