Welfare generosity, pregnancies and abortions among unmarried AFDC recipients

Even before the 1996 overhaul of the U.S. welfare system, a number of state s had ended the practice of paying extra benefits to families who have addi tional children while receiving welfare. Proponents believe that this refor m can reduce births to recipients, however many worry that it may encourage women to obtain abortions. Using a sample of unmarried AFDC recipients fro m the NLSY, we estimate a bivariate probit model of pregnancy and, conditio nal on becoming pregnant, the probability of abortion. Our results lend som e support for the proposition that reducing incremental AFDC benefits will decrease pregnancies without increasing abortions. JEL classification: I38, J13.