Impact of 1981 AFDC Reforms on Months Work and Welfare Duration.

AID to families with dependent children programs; PUBLIC welfare; WELFARE recipients; EMPLOYEE benefits; FAILURE time data analysis

We first showed that our sample of Wisconsin welfare recipients exhibited the same pattern as those in previous studies--earners were much more likely to stay off the program after the passage of OBRA. However, the probability of being on the program and not working did not change appreciably. We then presented new evidence showing that a substantial proportion of those remaining on AFDC continued to work even when they were likely to be no longer eligible for the $30 and one-third disregard. The main contribution of this paper has been to provide an estimate of changes in the hazard of leaving AFDC after OBRA while at the same time controlling for duration dependence and differences in personal characteristics. Since many of the exits from AFDC during the OBRA period reflected administrative case closings, we estimated separate hazard rates for the implementation period and the post-OBRA period. Our estimates indicate that average duration will be roughly three months shorter in the post-OBRA period for working recipients. OBRA had no significant impact on the duration of nonworking recipients. [ABSTRACT FROM AUTHOR]

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