Aid to Families with Dependent Children and Female Poverty

The causal relationships between poverty in female-headed households with minor children and Aid to Families with Dependent Children (AFDC) transfer payments for the period from 1959 to 1988 were examined by means of the Granger causality test. This study found weak statistical evidence that receipt of AFDC “causes” poverty, but strong statistical evidence that the number of poor female-headed households with minor children is a “cause” of the number of recipients of AFDC, and that an increase in the real dollar amount of AFDC per recipient family “causes“ a reduction in the poverty rate of female-headed households with minor children.