What Did the Out-of-Wedlock Birth Reduction Bonus Reward?

Sanders Korenman, City University of New York at Baruch
Theodore Joyce, Baruch College and National Bureau of Economic Research
Jennifer Walper, City University of New York at Baruch

The 1996 welfare reform act awarded a $100 million Out-of-Wedlock Birth Reduction Bonus each of five years to states that experienced the greatest reduction in nonmarital births, provided the abortion/birth ratio also fell. The Bonus has received little scholarly attention and there are no analyses of its demographic impact. We describe changes in martial and nonmarital births and abortions 1995-2001, both nationally and in "bonus" states. Abortion data come from an NBER-AGI effort that gathered individual-level data on abortions from state health departments. We examine whether nonmarital fertility fell in bonus states because marital fertility rose or nonmarital fertility declined; whether births fell among women at highest risk of welfare use, such as less-educated single mothers; whether the abortion/birth ratios fell because they fell among unmarried women, among married women, or both; and we describe changes in abortions for unmarried women and women at greatest risk of welfare use.