THE EFFECT OF WELFARE GUARANTEES ON CHILDRENS EDUCATIONAL-ATTAINMENT

This paper addresses the question of whether higher welfare benefit levels help or hurt poor children in the long run. The effect of the AFDC guarantee on the number of years of schooling children completed by 1985 is examined with longitudinal survey data from the Panel Study of Income Dynamics. The findings indicate that higher AFDC guarantees available to children following the separation of their parents are associated with higher educational attainment. The findings suggest that, rather than creating a negative environment for children, welfare is used by the family in positive ways as are other resources available to the family, such as the family's own income and help from friends and relatives. The overall effect of the welfare guarantee is due mainly to the impact of the guarantee on increasing the likelihood that children complete 1 to 4 years of postsecondary school. © 1990.