Determinants of AFDC Caseload Growth. B. NATIONAL CASELOAD TRENDS


Caseload growth rates have varied substantially since 1980. Exhibit 1.1 shows changes in AFDC caseload growth from 1980 through 1994, which is the period for this analysis. While absolute changes in participation have been much greater for the Basic program than for the much smaller Unemployed Parent (UP) program, relative changes have been greater for the latter. In order to illustrate this, we have plotted the national participation series for the two programs on the logarithmic scale; on this scale, the slope of a series at any point is equal to its rate of growth. Official periods of economic recession are also shown for reference purposes.

After peaking in 1981 at 3.6 million, the AFDC Basic caseload fell and then rose slowly until 1989, growing from 3.3 million to 3.5 million. Between 1989 and 1994, the Basic caseload rose by more than 40 percent, from 3.6 to 5.1 million. Recent data, not shown in Exhibit 1.1, show that the caseload has once again begun to decline, from 5.1 million in March 1994 to 4.1 million in January 1997.

Like the Basic program, the UP caseload grew rapidly from 1980 to 1981, but then, unlike the Basic caseload, it continued to rise through 1984. The average annual growth rate during this period was about 25 percent. The UP caseload peaked in 1984 at just over 300,000 and then fell gradually through 1990 -- again departing from the pattern observed for the Basic caseload. The Family Support Act of 1988 required all states operating AFDC programs to also have an UP program by 1990. Since 1990, the UP caseload has risen steadily, surpassing its previous peak in 1984, although it would not have reached that peak if only states with UP programs in place before 1990 were counted.

Based on the national time series, it would appear that the UP caseload is more sensitive to economic recessions than the Basic caseload--not surprising given the nature of the program. Another evident feature of the UP caseload series is its seasonal behavior, with higher caseloads in the winter and spring than in the summer and fall.

Exhibit 1.1

AFDC Basic and UP Caseloads, 1980-1994

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Note: Basic caseloads (solid line) are in millions of cases and UP caseloads (broken line) are in thousands of cases. Both Basic and UP cases are graphed in logarithmic scale. The plus signs trace the growth of UP programs after October 1990 excluding caseloads from states that initiated UP programs in accordance with the Family Support Act of 1988. Vertical lines show official recession periods.

Source: Office of Family Assistance (various years) and CBO (1993).