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Unintended consequences of welfare reform for children with single parents: a theoretical analysis

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  • Marco Francesconi

    ()

  • Helmut Rainer

    ()

  • Wilbert Klaauw

    ()

Abstract

This paper formulates a model to examine the effects of changes in tax-benefit policy on the behavior of divorced parents and the well-being of children in single-parent households. Noncustodial parents choose the level of a child support payment to transfer to custodians. These, in turn, decide over child good expenditures and the allocation of time between market work and parenting. Our main finding shows that welfare policies that subsidize childcare expenditures or reduce withdrawal rates, which are most certainly intended to improve the conditions of working single parents and their children, could actually have the reverse effect. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Marco Francesconi & Helmut Rainer & Wilbert Klaauw, 2015. "Unintended consequences of welfare reform for children with single parents: a theoretical analysis," Review of Economics of the Household, Springer, vol. 13(3), pages 709-733, September.
  • Handle: RePEc:kap:reveho:v:13:y:2015:i:3:p:709-733
    DOI: 10.1007/s11150-013-9226-5
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    References listed on IDEAS

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    1. Marco Francesconi & Helmut Rainer & Wilbert vanderKlaauw, 2009. "The Effects of In-Work Benefit Reform in Britain on Couples: Theory and Evidence," Economic Journal, Royal Economic Society, vol. 119(535), pages 66-100, February.
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    More about this item

    Keywords

    Divorced parents; Tax-benefit policy; Child care; Child support; D13; H31; J22;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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