Determinants of AFDC Caseload Growth. 6. Other Programs and Laws



We initially included the Medicaid expansion variable and interaction term in the AMB specification, just as in the final specification for the Basic model, but found that both terms had t-statistics well below one in absolute value. Hence, we dropped them in the final specification

SSI children

We also included the SSI child recipient variable in the initial AMB specification -- again because of the finding in the Basic participation model -- and subsequently dropped it from the specification because the t-statistic was below one in absolute value.

Unemployment Insurance

The log of the percent of unemployed persons who are insured has statistically significant, positive coefficients in the final specification. Given the positive relationship between the UI variable and participation in the Basic program found previously, a likely explanation is that unobserved factors such as administrative tightening of programs have common effects on both UI and AFDC.

Abortion Restrictions

The two abortion dummies have significant, and large, negative coefficients. They suggest that parental consent or notification laws and restrictions on Medicaid payments for abortion each reduce AMB by about 1.5 percent. Interpreting the Basic participation results at face value, these restrictions reduce the caseload by 0.2 and 0.3 percent, respectively, and reduce the number of child recipients by 0.3 and 0.5 percent, respectively. This implies that the number of children per AFDC family is reduced by 0.1 and 0.2 percent, respectively.(15) We would expect this reduction to reduce AMB by a comparable percentage amount. A more plausible explanation of the large effects is one we suggested in the discussion of the participation findings: they may be due to other unobserved efforts in the states that adopted these restrictions to reduce fertility and AFDC participation.

SSA Allowance Rates

We included our measure of SSA's administrative tightening of disability requirements in 1977-78 in our initial AMB specification, but the t-statistic was less than one.