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

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  • Wei-Yin Hu

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.

Suggested Citation

  • Wei-Yin Hu, 1999. "Child Support, Welfare Dependency, and Women's Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 34(1), pages 71-103.
  • Handle: RePEc:uwp:jhriss:v:34:y:1999:i:1:p:71-103
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    Cited by:

    1. David M. Blau & H. Naci Mocan, 2002. "The Supply Of Quality In Child Care Centers," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 483-496, August.
    2. Donna B. Gilleskie & Koleman S. Strumpf, 2005. "The Behavioral Dynamics of Youth Smoking," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 822-866.
    3. Cuesta, Laura & Cancian, Maria, 2015. "The effect of child support on the labor supply of custodial mothers participating in TANF," Children and Youth Services Review, Elsevier, vol. 54(C), pages 49-56.
    4. Tekin, Erdal, 2005. "Child care subsidy receipt, employment, and child care choices of single mothers," Economics Letters, Elsevier, vol. 89(1), pages 1-6, October.
    5. Ian Walker & Yu Zhu, 2004. "Child Support and Partnership Dissolution: Evidence from the UK," Studies in Economics 0408, School of Economics, University of Kent.
    6. Mocan, H. Naci & Tekin, Erdal & Zax, Jeffrey S., 2004. "The Demand for Medical Care in Urban China," World Development, Elsevier, vol. 32(2), pages 289-304, February.
    7. Ian Walker & Yu Zhu, 2004. "Child support liability and partnership dissolution," IFS Working Papers W04/18, Institute for Fiscal Studies.
    8. Ian Walker & Gillian Paull & Yu Zhu, 2000. "Child support reform: some analysis of the 1999 White Paper," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 105-140, March.
    9. 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.
    10. Roff, Jennifer & Lugo-Gil, Julieta, 2012. "A model of child support and the underground economy," Labour Economics, Elsevier, vol. 19(5), pages 668-681.
    11. 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.
    12. Landry, Craig E. & Liu, Haiyong, 2009. "A semi-parametric estimator for revealed and stated preference data--An application to recreational beach visitation," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 205-218, March.
    13. Fisher, Hayley, 2015. "The Impact of Child Support Receipt on Household Income and Labour Supply," Working Papers 2015-20, University of Sydney, School of Economics.
    14. Robert I. Lerman & Elaine Sorenson, 2003. "Child Support: Interactions between Private and Public Transfers," NBER Chapters,in: Means-Tested Transfer Programs in the United States, pages 587-628 National Bureau of Economic Research, Inc.

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