Afdc Receipt and Nonmarital Births: An Examination of Causality

Abstract

Utilizing a sample of 2,964 unmarried women over the period 1979-88 from the U.S. National Longitudinal Survey of Youth, a test was performed to determine the causal direction of relationship between receipt of aid to families with dependent children (AFDC) and the decision to have a nonmarital birth. The existence of "causality" is defined as the lack of a simultaneous relationship or joint dependency between these variables. One of the most interesting findings was a failure to reject the hypothesis that these choices are jointly determined. Both were found to depend upon variables that are demographic, economic, personal, and family-related. The profiles derived from the specification and estimation of a simultaneous equations system with discrete endogenous variables depict a woman whose fertility and economic decisions were predominantly based on economic deprivation, demographic situation, and family instability.

JEL Classification: J13, I38