To examine whether welfare serves as an incentive to early childbearing, this article explores the first steps in the process of becoming a teenage parent: risk of first voluntary sexual intercourse at an early age and, among teens having sex, contraceptive use at first intercourse. Alternative operationalizations of welfare include the AFDC benefit level in the state of residence, the ratio of the benefit level to family income, community-level welfare receipt, and family history of welfare receipt. Results do not support the hypothesis that higher welfare benefits provide an incentive that hastens sex or reduces contraceptive use. Analyses provide moderate support for a culture of poverty perspective among girls. Intergenerational welfare receipt has a borderline significant effect on the timing of first sex, and maternal welfare receipt predicts nonuse of contraception at first sex for girls. Strong support is found for a stressful life experiences perspective, in which both parental marital disruption and nonvoluntary sex predict earlier voluntary sex.