Laws that effectively increase child support are likely to reduce AFDC participation and average monthly benefits in two ways. First, as suggested by Gaylin and McLanahan (1995), they may reduce fertility by increasing the cost of fatherhood to men, and thus reduce the number births to unmarried mothers. Second, increases in actual and reported income from other sources for (potential) AFDC families would reduce AFDC payments. Furthermore, a sufficiently large increase would make the family ineligible for AFDC.
Gaylin and McLanahan (1995) analyze the impact of three child support enforcement (CSE) laws on nonmarital birth rates: presumptive guidelines, immediate wage withholding, and paternity long-arm statutes. Their results demonstrate that states with CSE statutes experience lower nonmarital birthrates (Gaylin and McLanahan, 1995). The authors have provided us with data detailing which states have enacted each of these laws and in which year they were enacted. In addition, Mr. Gaylin has given us data on mandatory withholding laws. We created dummy variables for all four types of CSE laws and initially include all four in all of the participation and AMB equations. Because we only know the year in which each statute went into effect, we assume that each became effective on January 1st of the known year.