Determinants of AFDC Caseload Growth. A. INTRODUCTION


The methodology we use is technically described as "pooled cross-section time-series analysis" because it "pools" time-series data for a cross-section of individual states. We estimated the models using quarterly data for 51 "states" (including the District of Columbia) from 1979.4 through 1994.3 .

The methodology is described in generic terms here. Plans for the specifications of the dependent and explanatory variables are discussed in Chapter Four. We describe the econometric model in Section B. In Section C, we discuss the methodology we use to control for changes in the age distribution of the population. The construction of quarterly time series for explanatory variables that are only observed annually is discussed in Section D. The estimation methodology is discussed in Section E, and the simulation techniques are described in Section F.