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Child Support, Welfare Dependency, and Women's Labor Supply

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  • Wei-Yin Hu
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    Abstract

    This study evaluates the potential effectiveness of alternative child support policies in reducing welfare program participation. Employing longitudinal data from the Panel Study of Income Dynamics, the analysis addresses the simultaneity of women's decisions regarding welfare participation, labor force participation, and annual hours of work following marital breakup. The estimation framework accounts for the endogeneity of child support payments with female labor supply and for the selection bias due to differential rates of remarriage among divorced/separated women. Results show that higher child support payments would (i) decrease welfare participation and (ii) increase average hours of work. The empirical estimates are used to assess the potential effects of adopting alternative child support policies such as the Wisconsin child support assurance system. These results suggest that large potential welfare cost savings are attainable but significant reductions in welfare participation rates would only be achieved through substantial improvements in child support enforcement or through government-assured child support payments.

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    Bibliographic Info

    Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

    Volume (Year): 34 (1999)
    Issue (Month): 1 ()
    Pages: 71-103

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    Handle: RePEc:uwp:jhriss:v:34:y:1999:i:1:p:71-103

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    Web page: http://jhr.uwpress.org/

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    Cited by:
    1. Paul, Gillian & Walker, Ian & Zhu, Yu, 1999. "Child Support Reform : Some Analysis of the 1999 White Paper," The Warwick Economics Research Paper Series (TWERPS) 539, University of Warwick, Department of Economics.
    2. Roff, Jennifer & Lugo-Gil, Julieta, 2012. "A model of child support and the underground economy," Labour Economics, Elsevier, vol. 19(5), pages 668-681.
    3. Zhou Yang & Donna B. Gilleskie & Edward C. Norton, 2004. "Prescription Drugs, Medical Care, and Health Outcomes: A Model of Elderly Health Dynamics," NBER Working Papers 10964, National Bureau of Economic Research, Inc.
    4. Ian Walker & Yu Zhu, 2004. "Child support liability and partnership dissolution," IFS Working Papers W04/18, Institute for Fiscal Studies.
    5. Tekin, Erdal, 2004. "Child Care Subsidy Receipt, Employment, and Child Care Choices of Single Mothers," IZA Discussion Papers 1121, Institute for the Study of Labor (IZA).
    6. David M. Blau & H. Naci Mocan, 1999. "The Supply of Quality in Child Care Centers," NBER Working Papers 7225, National Bureau of Economic Research, Inc.
    7. Robert I. Lerman & Elaine Sorensen, 2001. "Child Support: Interaction Between Private and Public Transfers," NBER Working Papers 8199, National Bureau of Economic Research, Inc.
    8. H. Naci Mocan & Erdal Tekin & Jeffrey S. Zax, 2000. "The Demand for Medical Care in Urban China," NBER Working Papers 7673, National Bureau of Economic Research, Inc.
    9. Irwin Garfinkel & Theresa Heintze & Chien-Chung Huang, 2001. "Child Support Enforcement: Incentives and Well-Being," JCPR Working Papers 215, Northwestern University/University of Chicago Joint Center for Poverty Research.
    10. Ian Walker & Yu Zhu, 2004. "Child Support and Partnership Dissolution: Evidence from the UK," Studies in Economics 0408, Department of Economics, University of Kent.

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