This article presents a model of teenage out-of-wedlock births that incorporates the effectsof both welfare and nonwelfare economic opportunities. We construct measures of the likely “medium-run” income available to a teenage girl in the event of an out of-wedlock birth and in the absence of a birth and then estimate a logit model to determine their importance in influencing fertility behavior. The model is estimated with data from the Panel Study of Income Dynamics on nearly 900 black teenagers. We find weak and statistically insignificant positive effects of Aid to Families With Dependent Children (AFDC) benefit levelsand stronger and significant negative effects of economic opportunities on the probability of AFDC-related out-of-wedlock teen births.

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