Transfer programs and aggregate household formations

The number of households in the United States increased by over fifty percent in the 1960s and 1970s, nearly double the rate of population growth. Part of the increase is explained by the movement of large cohort groups of the population into prime household-forming age categories, but higher headship rates also contribute. Age-specific headship rate increases result from non-demographic factors, and this paper focuses on the role of government transfer payment programs. Specifically considered are Social Security, Aid to Families with Dependent Children, and Food Stamps. These programs are found to have accounted for as many as 4 million net household formations between 1961 and 1984. The findings have implications for expected households formations in the 1990s.