Female-headed households are at greater risk of slipping into poverty than male-headed households. Indeed, sex and marital status of the head of household are the most important determinants of a family's poverty status in the US. Divorce, separation, death of a husband, and out-of-wedlock births can lead to female headship. Transfer payments, especially the Aid to Families with Dependent Children program, are blamed for contributing to increased marital instability and out-of-wedlock births. The authors examined the role of welfare benefits in influencing female headship. Preliminary results using standard estimation procedures indicate that transfers do not significantly influence female headship. Standard estimation procedures are, however, erroneous because they ignore differences in propensities to establish mother-only households. Therefore, adjusting for differences in propensities to establish female-headed households, the level of welfare benefits is indeed an important factor in explaining the variation in the changes in the birth rates to unmarried women. The use of a weighted measure suggests that welfare benefits, by increasing female headship of women who otherwise have low propensities to be female heads, have played a significant role in the feminization of poverty.
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