The Intergenerational Correlation in Afdc Participation: Welfare Trap or Poverty Trap?

IRP Discussion Paper 1100-96

Posted: 10 Sep 1996

See all articles by Phillip B. Levine

Phillip B. Levine

Wellesley College; National Bureau of Economic Research (NBER)

David J. Zimmerman

Williams College

Date Written: July 1996

Abstract

Several recent studies have shown that daughters whose mothers have participated in the welfare program Aid to Families with Dependent Children (AFDC) are themselves more likely to participate in AFDC when they head their own household. Other studies have shown that the earnings of parents and their children are highly correlated across generations. This suggests that any variable correlated with income, such as AFDC participation, will also be correlated across generations. This paper uses data from the original and youth cohorts of the National Longitudinal Surveys to investigate the question of whether the link in mother-daughter welfare participation is a causal relationship or whether it can be explained by the expected intergenerational correlation in earnings. Several reduced-form probit equations are estimated, and attention is directed to the potential endogeneity of key explanatory variables. The empirical findings suggest that much of the observed correlation in AFDC participation across generations can be explained by the intergenerational correlation of income and other family characteristics.

JEL Classification: I38, H53

Suggested Citation

Levine, Phillip B. and Zimmerman, David J., The Intergenerational Correlation in Afdc Participation: Welfare Trap or Poverty Trap? (July 1996). IRP Discussion Paper 1100-96. Available at SSRN: https://ssrn.com/abstract=4197

Phillip B. Levine

Wellesley College ( email )

106 Central Street
Wellesley, MA 02181
United States
781-283-2162 (Phone)
781-283-2177 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David J. Zimmerman (Contact Author)

Williams College ( email )

Williamstown, MA 01267
United States
413-597-2192 (Phone)

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