The Wisconsin Child Support Assurance System: Estimated Effects on Poverty, Labor Supply, Caseloads, and Costs
The economic impact of a child support assurance system (CSAS) is simulated with microdata on custodial families in Wisconsin. The CSAS includes a uniform child support standard, automatic wage withholding, a minimum child support benefit, and wage subsidy for eligible families. The simulation incorporates a model of the labor supply decision representing the custodial parent's choice of whether to participate in CSAS or in the current AFDC system. The results suggest that CSAS can significantly reduce poverty as well as welfare caseloads. If child support collections increase by one-half of the difference between estimated ability to pay child support and current collections, CSAS will be less costly than the current system.