wp_dropdown_categories not pointing to permalinks

I have been Googling this issue for 30 minutes. I read the template tag documentation and cannot see why this is happening or how to fix it.

On my index page, I added the wp_dropdown_categories function as follows:

<?php $args = array(
    'show_option_none'   => 'I post about stuff like...',
    'show_count'         => 1,
    'hide_empty'         => 1,
    'hierarchical'       => 1,
    'name'               => 'cat',
    'selected'           => 0,
    'class'              => 'index-cat',
    'depth'              => '3' ); ?>
 <?php wp_dropdown_categories( $args ); ?>

The output is linking to ?cat=ID and not my category permalink.

What am I missing?