Cover: The AFDC-Unemployed Fathers Program and Welfare Reform

The AFDC-Unemployed Fathers Program and Welfare Reform

by James Hosek

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The AFDC-unemployed fathers (UF) program serves poor husband-and-wife families with children in which the husband is unemployed. The report presents evidence that participation in UF has been low because many families prefer work over welfare, and, when the husband is unemployed, prefer unemployment insurance benefits to UF. However, higher UF benefits do increase UF participation. The UF program is currently offered in half the states. Had the program been extended nationwide in 1975, 34,000 cases would have been added (for a total of 151,000) at a cost of about $9.2 million/month for UF benefits and $4.2 million/month for food stamps. Unlike previous studies of participation, the analysis permits eligibility as well as participation given eligibility to be endogenous to the family. Also, a technique is devised for introducing site effects when making national projections, given a model estimated with data from a few sites.

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