Working paper no. 1995-27
Using data from the Survey of Income and Program Participation, this study analyzes the effects of AFDC benefits on living arrangements in combination with welfare participation. The study finds high rates of cohabitation and marriage among women receiving welfare. As well, results from the multivariate models indicate that the welfare system influences the decisions to cohabit and receive welfare. However, as the evidence partially depends upon the specific model adopted, results remain suggestive rather than conclusive. Nonetheless, the findings clearly show, for women on welfare, cohabitation is a preferred alternative to marriage. If the relationship between the two living arrangements is ignored, estimates of the impact of the welfare system on living arrangements and welfare-participation decisions are potentially flawed.