Are Families the New Safety Net? An Examination of the Receipt of Kin Support, Child Support and Welfare

Laura M. Argys, University of Colorado at Denver
Elizabeth Peters, Cornell University

As welfare reform reduced reliance on public transfers, families and communities were called upon to provide assistance to those in need. The central question we address is “to what degree do private transfers augment shrinking welfare benefits?” The answer to this question is crucial in an era of binding welfare constraints. In this paper we investigate the relationship between intergenerational family transfers and welfare. Using a sample from the PSID of families with children who have non-resident fathers, we examine the importance of income from child-support, kin-support and welfare between 1993 and 2001. Geographic identifiers in the PSID allow us to link these households with state policies regarding welfare eligibility and generosity and the efficacy of state child support collection efforts and allow us to determine the effect of these policies on income sources before and after welfare reform.