Overview of the Final Report of the Seattle-Denver Income Maintenance Experiment. Effects on Marital Stability (9)


Although, as mentioned earlier, the experiment was not explicitly designed to test effects on marital stability, much attention was paid to the issue in terms of both data collection and analysis.  To the extent that the effects of the experiment on marital dissolution were expected to depend on the guarantee and the tax rate, and to the extent that they were expected to differ according to income, ethnicity, and family type, the experimental design was well suited to the task of determining such effects.  But to the extent that response might depend on other factors — such as presence or absence of children, degree of stigma attached to the programs, or tp some unanticipated combined effect of the cash benefit and counseling/training subsidy treatment — the design was not optimal for testing those hypotheses.  This nonoptimality implies only that the response is measured with less statistical efficiency than with an optimal design, not that the design affects the validity of the response analysis.

Expected Effects

Previous research on the possible determinants of marital stability had not reached as well defined a consensus on the expected effects of cash transfers on marital dissolution and the chain of causation through which these effects may occur, as was the case with respect to labor supply.  There was some theoretical basis in the literature for believing both that cash transfers would reduce marital dissolution and that they would increase it.

The "conventional wisdom" at the time the experiment began, however, was relatively unambiguous.  The widely held view then was that the welfare system might be contributing to marital dissolution.  AFDC was restricted largely to one-parent families.  The AFDC-UF program for which two-parent families with children were eligible was not available in every state and, even where available, was so highly restrictive in its eligibility requirements that few two-parent families actually participated.  The empirical evidence on whether AFDC increased marital dissolution was mixed, but the policy presumption was that, if it did, a negative income tax for which both one-parent and two-parent families were eligible would be stabilizing influence.  A negative income tax with universal eligibility would be available to all families as soon as their incomes fell below a certain level, regardless of who was part of the family.  Therefore, the argument went, the incentive to leave one's family in order to make them eligible for cash transfers would no longer exist.

The Analysis

As already noted, two-parent families with children did not have to be legally married, or even claim to be, in order to be eligible for SIME/DIME benefits.  All they needed was to be living together on a continuing basis.  Unmarried couples without children were ineligible for SIME/DIME.  The SIME/DIME rules also permitted persons who had left their original partner to retain SIME/DIME eligibility and continue receiving negative income tax payments if their current income were below the breakeven level given their new family size.  Thus, if an original two-parent family split up, the experiment permitted both halves of the original family to continue receiving (separate) NIT payments.  If a member of the original couple formed a new continuing relationship, the new person was counted after a short waiting period as an eligible family member in computing SIME/DIME benefits.

During the first three years of SIME/DIME, roughly one in five of the couples married at enrollment were observed to break up.  Table 9 shows the proportion of original marriages that dissolved during the first three payment years, broken down by duration of treatment and ethnic group.

The methodology used in statistical analysis of the SIME/DIME data is complex and need not be spelled out in this overview.  A number of points are worth keeping in mind as the analytical results are discussed below.  First, the estimation methodology properly places substantial emphasis not only on the number of events but also on their timing.(10)  Second, the analysts place more emphasis on their findings for the smaller number of families in the five-year treatment group than for the larger number of families in the three-year treatment group, arguing that the longer treatment more closely approximates a permanent program.  In addition, as the raw date in Table 9 suggest, the statistical analysis demonstrates that the different ethnic groups react differently to the treatments, and hence needs to be analyzed separately, thus reducing further the size of the samples used in the analysis.

Third, the treatment group on which the statistical results are based includes those who received both the negative income tax treatment and the counseling/training subsidy treatment, as well as those on the negative income tax treatment only.  The statistical procedure used in the marital dissolution analysis to adjust for the counseling/training subsidy treatment is basically the same as that used in the labor supply analysis.  Although the interaction between the NIT and counseling/training subsidy treatments is statistically significant for Whites (but not for Blacks or Chicanos), the analysts conclude that the unsystematic nature of the interactions is most plausibly explained by sampling variable.  An additional finding that leads the authors to discount the importance of the interaction between the two types of treatment is that when they used their statistical methodology to re-estimate rates of marital dissolution in the New Jersey income maintenance experiment, they found the NIT effects to be similar in New Jersey (where there was no counseling or training subsidy) and SIME/DIME.

Table 9. Proportions of Original Marriages Observed to End
During the First 3 Years of SIME/DIME(1)

  Blacks White Chicanos
Control Group 0.205
NIT Treatment Group .278
  • 3-year Sample
  • 5-year Sample
1.  The number of original couples is shown in parentheses.
Source:  Final Report, Volume 1, Part V, Chapter 5, Table 5.3.

The Overall Effect

Table 10 shows the estimated effect of the negative income tax treatment for the three-year treatment and five-year treatment families, by ethnic group.  The rate of marital dissolutions among Chicanos is unaffected by the NIT.  As can be seen, the overall effect on marital dissolution rates is positive and substantial for Black and White families in both the three-year and five-year NIT treatment groups.

To confirm the observed effects for Blacks and Whites, the analysis differentiated the dissolution rates during the experiment from those occurring in the period after the treatments ended.  For this analysis, three time periods were used — enrollment to three years later, three years after enrollment to five years after, and five years after enrollment to seven years after (i.e., the post-experimental years for the five-year treatment group).  The impact of the NIT on marital dissolution effects for both the three-years and five-years treatments are again positive and significant for Blacks and Whites, but not for Chicanos.  In the post-treatment period, the experimental-control difference disappears altogether for both the three-year and five-year treatment groups.  Thus, the observed response in dissolution is clearly attributable to the experiment.

A separate analysis of the experimental effect on remarriage concludes that the NIT treatments did not affect remarriage rates for single White or Black women, but did reduce the rate by over 60 percent for single Chicano women.  Furthermore, after an analysis of how sample attrition may have biased estimates of the change in dissolution rates, the analysts concluded that the unadjusted estimates for Whites and Blacks, which range in Table 10 from 40 percent to 50 percent, should be reduced about 10 percentage points for Blacks and about 5 percentage points for Whites.

Table 10. Estimated Percentage Change in Marital Dissolution Rates
Caused by the NIT Treatments:  All Marriages(1)

  Blacks Whites Chicanos
3-year sample +47(2) -41(2) +19
5-year sample +43(2) +43(2) +2
Number of marriages 1,203 1,714 698
1.  Includes relationships entered into after the start of the experiment; 3-year treatment effect is estimated over a 3-year period and 5-year effect over 5 years.
2.  Significant at 1 percent level.
Source:  Final Report, Volume 1, Part V, Chapter 5, Table 5.5.

Explanation of Effects

What is the reason for the experimental effect on Black and White marriages and single Chicano women, given that this effect is the differential effect of the SIME/DIME NIT treatment compared to the effect of the public assistance (AFDC) option present in the control environment?  The analysts began explaining the increase in marital dissolution rates by noting a surprising general pattern of the experimental effects when estimated separately by NIT plan.  There was no perfectly consistent pattern, but what pattern there was suggested the paradox that lower marital dissolution rates are associated with higher guarantees.

Grouping by guarantee confirms that the experimental effect tends to decrease as the generosity of the guarantee increases.  In fact, for White couples the effect is statistically significant only for the low $3,800 guarantee (an 82 percent increase in the rate of marital dissolution), and for Blacks the effect is statistically significant only for the $3,800 guarantee (a 60 percent increase) and the medium $4,800 guarantee (a 91 percent increase).  For neither Black nor White is the effect significant for the high $5,600 guarantee.  This pattern of effects is especially striking in view of the fact that the $3,800 guarantee most closely approximates the generosity of the AFDC and AFDC-UF programs available to the control group.

Recognition of two aspects of the situation may account for this pattern of findings.  First, according to the existing literature, an increase in cash transfers can be expected to have two opposing effects on the marital dissolution rate.  Increases in family income tend to stabilize marriages, giving rise to an income effect; but a cash transfer program that provides financial alternatives to marriage for low-income women also tends to destabilize marriage, causing an independence effect.  Depending on the strength of the two effects, which are opposite in direction, a negative income tax reform may increase marital dissolution, decrease it, or leave it unchanged.  Second, since the basic income support offered to low-guarantee experimentals is similar to that already available to controls with children, it is also clear that the relevant difference between the two environments must be non-pecuniary.

Three non-pecuniary differences between the NIT and existing welfare programs may be relevant.  Knowledge of the availability of benefits in the event of marital dissolution is likely to be greater for experimentals under the SIME/DIME rules than for controls who would have to go the local welfare office to apply for AFDC and food stamps.  The time and nuisance cost of becoming eligible for benefits in the event of a dissolution is lower for the experimentals.  Experimental families already had eligibility for SIME/DIME; the only change due to a dissolution would be noting a change in family composition and available family resources on the regular monthly income report form.  The necessary procedure for applying for AFDC and food stamp benefits is more difficult and more time consuming.  Finally, the social and psychological cost (or stigma) of applying for AFDC and using food stamps are likely to be higher.  The SIME/DIME payments process was largely private.  The use of food stamps or AFDC exposes applicants to public acknowledgment of dependence or to interaction with possibly condescending welfare workers.  One way to sum up these non-pecuniary differences between the programs is to say that a dollar from welfare is less attractive than a dollar from SIME/DIME.