Child support compliance during economic downturns

Prior studies have found little evidence of an association between unemployment and child support compliance. However, few such studies used sample periods including a recession as severe as the one that occurred in 2007–2009 or a period following the Congressional mandate requiring states to adopt immediate wage withholding for all child support orders established after January 1992. While virtually assuring compliance by steadily employed nonresident fathers, this requirement imposes hardships on unemployed nonresident fathers, especially during recessions, because modifying child support orders is costly, difficult, and uncertain. Using the CPS-CSS, this study provides reduced form estimates of the association between unemployment and child support compliance over a period (1993–2011) with severe business cycle fluctuations and immediate wage withholding in full effect. Despite controls for fixed effects (state and year) and a state-specific linear time trend, we found that local unemployment rates were associated with decreases in some measures of compliance in our full sample. In models using non-pass through child support payments, which minimized measurement error due to misreporting, there was a much more consistent relationship between unemployment and compliance. Further, after restricting the sample to cash assistance recipients to avoid bias due to selection into the child support enforcement system, we found that local unemployment rates were consistently, strongly, and negatively associated with compliance. Given the volatility in unemployment rates during recent recessions and in the Great Recession in particular, these findings suggest the potential for a large-scale impact of macro-economic factors on the consistent provisions of child support.