What Did the "Illegitimacy Bonus" Reward?

Sanders Korenman, Ted Joyce, Robert Kaestner, Jennifer Walper

NBER Working Paper No. 10699
Issued in August 2004
NBER Program(s):Health Economics, Children

The 'Illegitimacy Bonus,' part of 1996 welfare reform legislation, awarded $100 million in each of five years to the five states with the greatest reduction in the nonmarital birth ratio. Three states -- Alabama, Michigan, and Washington DC -- won bonuses four or more times each, claiming nearly 60% of award monies. However, in none of these three states was the decline in the nonmarital birth ratio linked to increases in proportions married, and only in Michigan was it linked to declines in nonmarital (relative to marital) fertility within demographic groups, behavioral changes that the Illegitimacy Bonus was presumably intended to reward. Shifts in the racial composition of births accounted for 1/3 (Michigan), 2/3 (DC) or all (Alabama) of the decline in the nonmarital birth ratio. The non-marital birth ratio fell most in DC, averaging 1.5 percentage points per year over the award period. However, the number of black children born in DC fell by nearly one half from 1991 to 2001. Changes in population composition alone primarily a decline in the number of black women aged 15 to 34 can account for the entire decline in the nonmarital birth ratio in DC between 1990 and 2000.

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Document Object Identifier (DOI): 10.3386/w10699

Published: Korenman Sanders & Joyce Ted & Kaestner Robert & Walper Jennifer, 2006. "What Did the "Illegitimacy Bonus" Reward?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-36, April. citation courtesy of

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