A time-series regression analysis of Aid to Families with Dependent Children caseload movements in Los Angeles during the pre-Reagan and post-Reagan time period points to local demographic change as a main cause of rapid caseload expansion. Growing numbers of female-headed households swelled the total number of potential recipients. Meanwhile, a stagnant labor market for low-skilled workers, and the rising cost of living in the locality, further stimulated caseload increases. Results indicate that the extension of restrictive welfare policies will not so much reduce service dependency, as increase extreme poverty and generate longer term welfare dependency in a major urban area.
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