Child Support and Mothers‘ Employment

Abstract

Previous research has found that child support receipts deter mothers' labor supply less than does other non‐wage income. This paper argues that because child support is a variable income source, actual receipts may differ from unobservable permanent receipts on which hours worked are based. This introduces an errors‐in‐variables bias causing the estimated income effect of child support on hours worked to be biased toward zero. When one replaces actual receipts with predicted permanent receipts, such income effect is found to be statistically indistinguishable from that of other non‐wage income.

The Effect of Child Support Enforcement on Marital Dissolution

“…I acknowledge that there may be potential labor supply effects of child support (Hu 1993, Graham 1990, Graham and Beller 1989, as well as nonincome effects and concerns related to CSE; these include the issues in the relationship between the father and the child (Seltzer 1992;Seltzer, Schaeffer, and Charng 1989), and issues in the relationship between the parents, such as conflict and fear of abuse (Edin 1994, Furstenberg 1994). If we drop the assumption of costless bargaining and instead assume no bargaining between spouses (still assuming unilateral divorce), we have that divorce occurs if ZDh > ZMh or ZDw > ZMW.…”

The effect of child support on the labor supply of custodial mothers participating in TANF

“…Yet, comparisons show that child support income has a smaller negative effect on mothers' labor supply than other nonlabor income (Graham, 1990;Graham & Beller, 1989). Estimates of the child support effect among divorced and separated mothers vary from onethird (Graham & Beller, 1989) to half (Graham, 1990) the size of the other nonlabor income effect.…”

“…Based on multivariate regression analyses and data from the 1979/1982 Current Population Survey (CPS) data, this literature suggests that child support is negatively associated with number of hours worked (Graham, 1990;Graham & Beller, 1986;Graham & Beller, 1989). Yet, comparisons show that child support income has a smaller negative effect on mothers' labor supply than other nonlabor income (Graham, 1990;Graham & Beller, 1989).…”

“…These studies (Graham, 1990;Graham & Beller, 1986;Graham & Beller, 1989) have been informed by theoretical models of the effects of nonlabor income on the labor supply of participants in public assistance programs (Burtless & Hausman, 1978;Moffitt, 1983Moffitt, , 1986. Given this framework, child support receipt influences mothers' decisions on both AFDC participation and employment, and increases in child support income do not necessarily reduce custodial mothers' employment.…”

“…Estimates of the child support effect among divorced and separated mothers vary from onethird (Graham & Beller, 1989) to half (Graham, 1990) the size of the other nonlabor income effect. Research that examines why the effect of child support should be any different from that of other nonlabor income suggests that the irregularity of noncustodial-parent payments makes child support a risky income source and, as a result, some custodial mothers may use the labor market as a way to reduce the volatility of family income (Graham, 1990).…”