AbstractChanges in the federal program of Aid to Families with Dependent Children have been considered which would alter the program from one in which federal dollars match state and local contributions, to a program in which the federal contributions are fixed in the form of a block grant. A review of econometric evidence suggests that under a block grant scheme, the federal contribution must be substantially greater than under a matching grant if the program's beneficiaries are to receive the same level of benefits. If the federal government seeks to maintain benefits unchanged in real terms, the states' share of total welfare expenditures will decline.