Unequal Burden: The Impact of the Man in the House Rule on Black Welfare Recipients

This paper examines the racial impacts of the 1981 Omnibus Budget Reconciliation Act (OBRA) on Aid to Families with Dependent Children (AFDC) payments. Using household-level data from 1975 to 1995, the analysis employs a difference-in-differences approach and an event study design to evaluate changes in the relative payment gaps between Black and non-Black households. The results indicate that OBRA significantly widened the gap in AFDC payments between Black and non-Black households, with Black households experiencing a sharper relative decline compared to their counterparts. While evidence for parallel trends before OBRA is mixed, the sharp and immediate widening of the payment gap after its implementation, coupled with the absence of dynamic treatment effects, underscores OBRA’s role in exacerbating racial disparities in welfare payments.