Welfare Reform

To reduce out-of-wedlock pregnancies among welfare recipients, some states have imposed family caps on welfare benefits. One factor that determines the amount of cash benefits a family receives is the family’s size–larger families receive more benefits. In states with a family cap policy, however, no additional cash benefits are provided with the birth of another. Twenty-three states have implemented some variation of a family cap, breaking the traditional link between a family’s size and the amount of its monthly welfare check. Generally, these states implemented family cap policies as part of their welfare reforms to reduce out-of-wedlock births and to encourage self-sufficiency. During an average month in 2000, 20 of the 23 family cap states reported that about 108,000 families received less in cash benefits than they would have in the absence of state-imposed family cap policies. In an average month, about nine percent of welfare families in these states had their benefits affected by the family cap. A family’s welfare benefits are affected by several factors, including earnings and receipt of child support. Therefore, states were unable to report the precise effect of the family cap on benefits. Because of limitations of the existing research, GAO cannot conclude that family cap policies reduce the incidence of out-of-wedlock births, affect the number of abortions, or change the size of the welfare caseload.