Law Fails to Curb Births to Welfare Mothers

July 02, 1995

It's a simple idea that's had a sweeping impact on welfare reform: Remove the financial incentive and welfare mothers won't have more children.

It began in 1992 when New Jersey enacted a "family cap" law barring additional payments to welfare mothers who have children 10 or more months after they apply for welfare.

Based on reports of the law's success, several states -- including Maryland -- implemented similar laws. The family cap also became an important part of the congressional push for welfare reform.

But a recent Rutgers University study indicates that New Jersey's family cap has had no impact on welfare mothers.

Michael C. Laracy, a senior program associate at the Annie E. Casey Foundation, of Baltimore, explains how the push for family cap legislation is being fueled by erroneous information. Before joining the foundation in August 1994, Mr. Laracy was assistant commissioner for policy, planning and program evaluation in the New Jersey Department of Human Services. The Annie E. Casey Foundation is the nation's largest philanthropy for disadvantaged children.

Q: Do the results of the Rutgers evaluation mean that the earlier claims of impacts were invalid? Why such a great difference?

A: Yes, the Rutgers findings render all previous claims invalid. Specifically, they show that the pronouncement by former Governor [James] Florio in November 1993 that the New Jersey child exclusion [family cap] law was an "obvious success" because two months of data suggested a 15 percent drop in birth rates was unwarranted and without merit.

Likewise, the Rutgers study refutes the testimony drafted by June O'Neill [then an economics professor at Baruch College and now director of the Congressional Budget Office] late last year -- which claimed to find a drop of between 19 and 29 percent in birth rates. Probable reasons for the erroneous findings in her analysis lie in that it used still-incomplete data, it did not use a long enough period of measurement and it disregarded the lags in reporting births that were known to be a problem in the sample.

Q: Did other states or the federal government make any significant public policy decisions based on the earlier erroneous analyses and claims about impacts in New Jersey?

A: Absolutely. Unfortunately, at least 10 states have enacted family cap laws, applied for federal waivers, or introduced legislation since the November 1993 Florio announcement. In almost every instance, the alleged results from the New Jersey law were cited in support. Moreover, in its welfare reform bill H.R. 4, the House of Representatives mandated that all states adopt such provisions, with many supporters citing the dramatic 29 percent figure. And proponents in the Senate continue to cite the now-discredited data.

Q: The Rutgers analysis shows no difference between the birth rates for the women in the treatment group, who were affected by the family cap, compared to an equal number of women in the control group who were exempt from the law's sanctions. What does this mean? What is its significance?

A: The Rutgers analysis reveals that the birth rates for both the treatment and control groups dropped virtually identical amounts from before the law took effect to afterward. The lack of any significant difference between the two groups shows that, at least thus far, the law has had no discernible impact -- no effect -- on the child-bearing practices of the women subjected to its penalties and incentives. The principal significance of this finding is that it supersedes and strongly refutes earlier, unofficial pronouncements that the law was reducing births to welfare mothers on the order of 15, 19, and even 29 percent.

Based on the Rutgers report, supporters of family cap laws -- in New Jersey, in the U.S. Congress, and in state capitals across the country -- no longer have any empirical evidence whatsoever for their claims that such laws will discourage out-of-wedlock births.

Q: Are the Rutgers findings surprising?

A: Not really. Over the last decade, a series of studies have shown very little relationship between welfare grant levels and birth rates of low-income women. These analyses generally compared the birth rates for welfare mothers in a range of states among which the monthly cash grant levels varied widely. Although the findings were not uniform, they collectively show only modest correlations between the number of children in a family and the states' benefit levels. For white and Hispanic families there tended to be a slight positive correlation; for black families, no relationship whatsoever. Thus, the Rutgers findings are quite consistent with the earlier scientific work in this area, all of which showed that reproductive decisions of low-income women are not very sensitive to welfare grants.

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