The Effect of Family Size on Incentive Effects of Welfare Transfers in Two-Parent Families

Family size is an important determinant of family well-being, and it is a good predictor of poverty. This study examines effects of waiving the 100-hour rule, by family size, and distinguishes between the “work-incentive effects†and the “eligibility effects†of the waiver. The 100-hour rule limits eligibility to aid to two-parent families in which the principal earner is unemployed or underemployed (works fewer than 100 hours per month). The study uses data from the Link-Up randomized experiment, conducted in California’s Central Valley, from 1992 to 1994. The findings show that the eligibility effect of the waiver does not differ by family size, but the work-incentive effect does.