In recent years, there has been continued interest in marriage, cohabitation, and the welfare system. The Deficit Reduction Act of 2005 provided $150 million annually in funds for initiatives to promote healthy marriages based on the perception that married couples are more stable, among other potential benefits for families and children. This working paper examines whether the recent push for marriage initiatives and the discretion afforded to states under welfare reform has translated into rules or regulations that favor marriage and discourage cohabitation. The researchers found that, despite some states adopting express policies to encourage and favor marriage, the welfare eligibility and work-rule structures in these states appear to work against such policies. Further, those structures may discourage marriage the most in the situations where the state would most want to encourage it, namely, where the male has financial resources. In addition, the most favored living arrangement is not to remain single but to cohabit with a male who is not the father of any of the children.