DOES AFDC-UP ENCOURAGE 2-PARENT FAMILIES

Effective October 1990, the Family Support Act (FSA) of 1988 extended the previously state-optional AFDC-Unemployed Parent (UP) program to a ll states. This policy was undertaken in an effort to reduce the two-p arent penalty of the AFDC program, but little is actually known about UP and its influence on family structure. This study clarifies what is meant by ''two-parent family'' in the federal legislation and provide s new evidence on AFDC's incentive effects. The empirical analysis mak es use of the cross-state variation in the generosity of AFDC benefits and the presence (or absence) of AFDC-UP before the FSA of 1988. Spec ifically, these state-level data are appended to data from the 1987 Na tional Survey of Families and Households (NSFH). A real advantage of t he NSFH is that it allows for the identification of those truly eligib le for the UP program-married and unmarried couples who have an ''in-c ommon'' dependent child. The major empirical finding is that contrary to the hopes of Congress, a state's provision of a UP program is not f ound to encourage two-parent families.