Child Poverty and Welfare Benefits: A Reassessment with State Data of the Claim That American Welfare Breeds Dependence

Abstract. Several critics of the American welfare system have claimed that it exacerbates the problem of poverty by making living in poverty preferable to acting in ways that would promote upward mobility. One version of this argument, by Gallaway and Vedder, proposes that in the 1970s this resulted in states with high welfare benefit exhibiting increases in child poverty. State data for 1970, 1980, and 1970‐1980 are analyzed by means of multiple regression to assess this argument. The results suggest that the relationships between high welfare benefits, child poverty, and recipiency of Aid to Families with Dependent Children (AFDC) are much less clear‐cut than has been alleged. They also cast doubt on the wisdom of using aggregate data to analyze these relationships.