The Impact of State Welfare Policies on Women's Cohabitation

Abstract

Marriage and its relation to choices of fertility, work, and welfare receipt have been widely studied, yet little research has focused on nonmarital cohabitation. This paper presents a multinomial logit model of an American woman's major cohabitation options: not cohabiting, cohabiting with a spouse and possibly others, or cohabiting with others but not with a spouse. Because cohabitation has the possibility of alleviating poor women's need for public assistance, I investigate the connection between state welfare policies and the cohabitation choice. The analysis moves beyond the typical measure of welfare generosity--the monthly benefit level--to include two sets of state welfare regulations that affect how cohabitors' contributions to household expenditures may affect the woman's welfare benefit. The use of Census data allows sufficient sample sizes for separate estimation for White and Black women. I find that many personal and state variables substantially alter the choice of cohabitation, but welfare programs generally do not. The strongest impact of welfare programs falls on the choice of marriage, where I find support for the theory that more generous AFDC payments should be associated with fewer marriages. Although the patterns vary by race, the results reveal that other welfare policies do not exert a strong influence on women's choice of cohabitation and marriage.