A BEJEAP Topics article.

Abstract

The Out-Of-Wedlock Birth Reduction Bonus (“Illegitimacy Bonus”), part of the 1996 welfare reform legislation, awarded up to $100 million in each of five years to the five states with the greatest reduction in the non-marital birth ratio. Alabama, Michigan, and Washington D.C. each won bonuses four or more times, claiming nearly 60% of award monies. However, for these bonus winners, changes in the racial composition of births accounted for between one-third and 100% of the decline in the non-marital birth ratio. The non-marital birth ratio fell most in D.C., averaging 1.5 percentage points per year over the award period. Declines in non-marital birth ratios in Michigan and Alabama were slight. But the non-marital birth ratio fell in D.C. in large part because the number of black children born there fell dramatically, and a decline in the black population alone accounted for one third of the decline in black births. Within-race changes in non-marital birth ratios raised the overall non-marital birth ratio 0.5 percentage points in Alabama, and lowered the non-marital ratio by one percentage point in Michigan, and by about three percentage points in Washington D.C. Because it was based on unadjusted changes in states’ aggregate non-martial birth ratios, the Illegitimacy Bonus rewarded racial/ethnic compositional changes at least as much as it rewarded declining non-marital birth ratios within major racial/ethnic groups.

Submitted: January 14, 2005 · Accepted: April 3, 2006 · Published: April 18, 2006

Originally published in Topics in Economic Analysis & Policy.

Recommended Citation

Korenman, Sanders; Joyce, Ted; Kaestner, Robert; and Walper, Jennifer (2006) "What Did the "Illegitimacy Bonus" Reward?," Topics in Economic Analysis & Policy: Vol. 6 : Iss. 1, Article 8.
Available at: http://www.bepress.com/bejeap/topics/vol6/iss1/art8