Family cap and nonmarital fertility: The racial conditioning of policy effects

Using an experimental design, this research examines the effect of the nation's first family cap on the births, abortions, and contraception use of over 8,000 women receiving public assistance in New Jersey. The family cap denies additional cash benefits to children conceived while the mother is receiving public assistance. Our research shows that a targeted welfare benefit manipulation does influence fertility behavior; however, the effect is conditioned by race. We find that Black women in the experimental group have a 21% lower birth rate and a 32% higher abortion rate than Black women in the control group. We do not find a birth effect for Hispanic or White women. We discuss the policy implications of the effects of a segmented family cap. Key Words: family cap, fertility, race differences, welfare reform. The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 repealed Aid to Families with Dependent Children (AFDC), provided the structure of the Temporary Assistance for Needy Families (TANF) block grant program, and profoundly changed the government's legal obligation to provide cash assistance to low income adults and their children. A principal goal of TANF is the prevention and reduction of the incidence of out-of-wedlock pregnancies. It is to be achieved through the establishment of state numerical targets, the implementation of a "bonus to reward decrease in illegitimacy ratio," an Abstinence Education Grant Program, and the option for states to employ a family cap policy (U.S. General Accounting Office, 2001). The family cap, which has taken several forms, denies additional cash benefits to those children born 10 or more months after the mother began receiving welfare payments, although these children typically remain eligible for other benefits, including Food Stamps and Medicaid (Harvey, Camasso, & Jagannathan, 2000). Twenty-three states have chosen to include a family cap policy as a component of welfare reform; 15 of these states began the policy under provisions of Section 1115 of the Social Security Act that allowed states to waive specific provisions of the Act and experiment with initiatives that would improve the AFDC program. From 1992 to the passage of PRWORA, 81 waivered experiments were approved by the Bush (I) and Clinton administrations with approval contingent on a plan for evaluating the proposed changes (Harvey et al., 2000). The first acceptance of a family cap waiver was the initiative proposed by New Jersey in early 1992. This policy called for the loss of additional cash benefits of $102/month if the child is the second child born and $64/ month for any higher order births. In this paper we examine the effect of New Jersey's implementation of the nation's first family cap on nonmarital births, abortions, oral contraception use, and contraceptive sterilization of women receiving public assistance. The cap was implemented along with several other waivers that (a) enhanced earnings disregard for households with capped grants; (b) provided a 2-year extension of Medicaid benefits for welfare recipients that exited AFDC for employment; (c) toughened sanctions for failure to participate in the JOBS program; (d) eliminated the loss of cash benefits for children if a mother married; and (e) required women with children age 2 and older to participate in training/education programs. Unlike the family cap, these policies do not target fertility behavior and, when tested, have not been found to influence birth outcomes (Crouse, 1999; Horvath-Rose & Peters, 2001). New Jersey is a state with a long tradition of welfare reform experiments beginning with the negative income tax studies of the late 1960s (Kershaw & Fair, 1977); however, the clear focus of these earlier studies, including the New Jersey Grant Diversion Project (Thornton & Hershey, 1990); the Teenage Parent Welfare Demonstration (Greenberg & Shroder, 1997); and post-TANF evaluations (Rangarajan & Wood, 1999), has been on employment and/or earnings of recipients. …