Previous research has studied the effects of welfare payments under the Aid to Families with Dependent Children (AFDC) program on incentives and behavior. By lowering the cost of raising children, states with larger welfare payments have higher rates of fertility among poor women, an adverse...

Clarke and Strauss (1998), among others, have determined that the magnitude of financial transfers to unwed mothers is positively related to out-of-wedlock fertility rates. Increases in fertility rates must be accompanied by increases in unprotected sex, and unprotected sex allows for the spread...