Does Welfare Dependency Cause Female Headship? The Case of the Black Family

This paper examines empirically the "economic motivation" explanation for the dramatic rise in the proportion of black families headed by females, an explanation positing the attractiveness of welfare as an inducement to black women to "choose" to remain unmarried. Using a Granger-Sims statistical causality test, applied to Current Population Survey and Social Security Administration data for the years 1955 to 1980, we establish that black female headship is not statistically caused by welfare attractiveness. We also argue for the endogeneity of relative AFDC benefit rates in a model of welfare dependency and female headship. Estimation of female headship, welfare dependency, and welfare benefit equations using an instrumental variable technique further fails to expose a short-term effect of welfare on family structure. The statistical driving force behind the increase in black female-headed families appears to be the decline in the supply of black males. The black female age distribution also is found to be a significant determinant of female headship among these families. We conclude that there indeed may be more than purely demographic effects involved in the changing composition of black families, such as long-term effects of social policies; these effects, however, cannot be uncovered in short time-series data