Does Welfare Policy Influence Children’s Behavior? A Regression Discontinuity Analysis of Food Stamps Recipients

Liyun Wu, University of Michigan

Recent research in welfare policy and child behavior outcomes suggests an association between welfare participation and children’s behavior problem. There are two major problems in this literature when examining the causal impact of welfare participation on children’s behavior outcome. One is selection bias. By simply controlling for a set of observable variables, prior research has ignored the selectivity of children into welfare program. The other is the straightforward application of cross-sectional multivariate regression. Results from simple cross-sectional multivariate regression are usually biased and inconsistent. A regression discontinuity design is developed to examine this causal impact. Using data from the National Longitudinal Survey of Youth Mother-Child Files of the most recent waves between 1998 and 2006, I find that children of food stamp recipients exhibit higher levels of emotional and behavior problems than their peers. This discrepancy varies across gender and racial/ethnic groups. The findings’ potential for policy analysis is also examined.