This dissertation contains two essays on the effect of welfare reform on child- birth, marriage, and divorce. In the first essay, I exploit the cross state variation in welfare reform implementation to identify its effect on birth rates. The results from multinomial logit models suggest that the welfare reform significantly increased the probability of marital births. The out-of-wedlock birth rates decreased but this effect is not significant. The strong work incentives decrease birth rates in both marital and non-marital statuses suggesting that bearing a child is not appealing for women who are more progressive in careers. However, the most aggressive welfare policy significantly increases marital birth as expected. Birth rates among teenage girls are not affected by the welfare reform. I further investigate the effect of the family cap policy. Using a semi-natural experiment, I compare the birth rate of women who already have had a second or higher order birth (treatment group) to women who have had one child (comparison group), in states with and without family caps. The difference in difference estimates reveal a strictly negative effect of family caps on the higher order birth rates as expected. In the second essay, I use reduced-form estimation and cross-state variation in timing of reform adoption to extract both mechanical and behavioral effects of welfare reform on marriage and divorce likelihood. I construct a flow measure of marriage and divorce by matching individuals in the Current Population Survey from March 1988B to 2002 and observing changes in marital status. I introduce a converse matching procedure to detect women who are not in the survey for two consecutive years. I find that the welfare reform has a significantly negative effect on marriage rates and an insignificant effect on divorce rates. The Difference-in-Difference estimates suggest that marriage among disadvantaged women is negatively affected by the welfare reform. I also provide a theoretical model to decompose the effect of welfare reform on marriage due to each of the components of the reform, i.e., time limits, work sanctions, earnings disregards, and maximum cash benefits. My results provide a novel explanation for the effects of work incentives and welfare restrictions on marriage.
