A number of scholars contend that recent increases in economic dependency and poverty have been stimulated by “overly generous” public assistance. Cash and noncash transfers and the eligibility guidelines that govern their distribution purportedly discourage employment and encourage the rise of female-headed families. These “culture-of-poverty” arguments and alternative hypotheses are examined through time series analyses. The results are mixed. On the one hand, the combined package of cash and noncash transfers is modestly related to the rise of female headship and economic dependency and more strongly related to declines in the labor force participation of young nonwhite males. On the other hand, cash transfers reduce poverty. Though the current welfare system is fraught with a number of shortcomings, we find that culture-of-poverty explanations of post-1970 increases in economic dependency and poverty are not very powerful. A more comprehensive theory is called for. Such a theory needs to explain how structural changes in our economy are affecting economic opportunity.