DOES WELFARE CAUSE INCREASES IN FEMALE-HEADED HOUSEHOLDS

Public discourse in the United States has become increasingly dominate d by debates over the impact of welfare expenditures on specific demog raphic groups. Of particular concern is the potential impact of welfar e expenditures on the formation of female-headed households. Applying Granger causality to time series data on expenditures on Aid To Famili es with Dependent Children (AFDC) and the proportion of families heade d by females, the authors examine whether increases in AFDC expenditur es causes a rise in the number of female-headed households. Evidence p rovided is inconsistent with the hypothesis that rising welfare expend itures generates an increase in the number of female-headed households . More generally, the results suggest that public policies which attem pt to reduce the numbers of female-headed households via a reduction i n AFDC benefits or a tightening of eligibility requirements are unlike ly to be successful.