Evaluating the Effects of Changes in AFDC: Methodological Issues and Challenges

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Abstract
Analysts are commonly called upon to perform the difficult task of evaluating the effects of specific changes in public policy upon the behavior of individuals, such as a change in the provisions of the Aid to Families with Dependent Children (AFDC) program relating to the benefits of those in the program who find work. When charged with such a task, analysts commonly try to answer the question by tracing the behavior of a fixed panel of individuals, comparing the experience of the group before and after the change in policy. That approach, however, risks major errors; in the case of the AFDC program, for instance, changes in the work benefit provisions affected the decisions of some who might have come into the program, a consequence that would not be picked up by a fixed panel of initial recipients. Cross-sectional data drawn independently from a general population at points in time before and after a policy change can often provide a more valid measure of the effects of the policy change than can panel data; moreover, cross-sectional data are usually less expensive and more readily available.

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