Determinants of AFDC Caseloads: How Have Exit and Take-Up Rates Been Affected by Welfare Reform?

This paper examines AFDC participation and exit decisions in response to the recent changes in the welfare program. Different reform policies are identified separately and allowed to have varying impacts on current and potential recipients. Making use of the extended panel provided by the NLSY79, a monthly competing risks hazard model of eligibility and participation is estimated. Results show that while recipients are responsive to some provisions, the provisions retard rather than hasten exit. However, potential recipients are deterred from taking up benefits by the presence of time limits.