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The AFDC program contains incentives for family dissolution, as well as the usual incentives regarding work effort inherent in transfer programs of its type. The research discussed below attempts to determine the extent of the impact of these incentives. Cross-section analyses of SMSAs in 1960 and 1970 are presented, relating the proportion of female-headed families and the proportion of the female population receiving AFDC assistance to the size of the AFDC payment and related variables. The results indicate that both female-headship rates and AFDC recipient rates are significantly affected by the relative size of AFDC payments in white and nonwhite populations alike.
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