October 8, 2008
FAMILY CAP'S EFFECT ON BIRTH RATES
By: Ryan F. O'Neil, Research Assistant
You asked if family caps decrease birth rates.
We looked at two peer-reviewed articles that analyzed data as a means of investigating the relationship between the family cap and birth rates. Both articles concluded that family cap had no impact on birth rates.
The first article was “Do Family Caps Reduce Out-of-Wedlock Births? Evidence from Arkansas, Georgia, Indiana, New Jersey, and Virginia” (Wendy Tanisha Dyer and Robert W. Fairlie, Economic Growth Center, Yale University, October 2003, http://www.econ.yale.edu/growth_pdf/cdp877.pdf).
The authors compared trends in birth rates for women aged 15 to 45 in five states that implemented family caps with 11 non-family cap states from 1989 to 1999. The compared maximum Aid to Families with Dependent Children payment amounts, number of abortion providers, and unemployment rates in 1992 and 1996 to demonstrate the comparative similarity of the two groupings so that birth rate trends could not be attributed to another cause.
Dyer and Fairlie found “overall, birth rates in family cap states followed a pattern similar to those in non-family cap states.” Both groups of states saw a peak in 1991, a downward trend to 1994, and then an increase for the rest of the decade.
The two compared subgroups in family cap states and non-cap states that included single and married women, high school dropouts and high school graduates, and various racial and ethnic groups and examined the differences between identical groups in family cap and non-family cap states. They reported that in each group “we find statistically insignificant coefficients, and thus do not find evidence that family caps reduced fertility.”
The second article was “Is there an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap” (Melissa Schettini Kearney, Journal of Human Resources, October 2004, http://www.brookings.edu/articles/2004/spring_welfare_kearney.aspx?rssid=kearneym).
Kearney used the different timing in implementing family caps in 18 states as a basis for comparison and compares the state with family caps to non-family cap states from 1989 to 1998. She used birth-rate data from the vital statistics natality data compiled by the U.S. National Center for Health Statistics. She limited the analysis to women between 15 and 34, reasoning those women were the most likely to receive welfare.
Kearney concludes that “the family cap did not noticeably affect fertility rates of women age 15 to 34.” When controlling for race and education level, she found that there was no statistical impact from the family cap for each of eight different demographic groups. Curiously, Kearney found that white, unmarried high school-dropouts saw an increase in their birth rate due to the family cap.