Determinants of AFDC Caseload Growth. 3. Average Monthly Benefits


The model predicts very little change in AMB over the period in all states, yet there was a substantial decline. Particularly anomalous is the model's prediction of an increase due to changes in benefit variables in the first three-year subperiod, when a substantial decline actually occurred. While effects of OBRA81 that are captured by the year dummies and not included in the simulation may explain part of the anomaly, the largest negative coefficient on a year dummy is for the previous year. We have devoted relatively little effort to development of the AMB model, and it may be that additional effort would resolve this anomaly.