Earnings instability and child protection: Evidence from state administrative data

Given previous inconclusive results on unemployment and involvement with the child welfare system (CPS) and the growing attention on precarious labor market conditions, this article relies on administrative data on wage and social benefits from the state of Wisconsin to investigate the relationship between employment instability and subsequent child maltreatment investigations. Using an event history approach, this study analyzes earnings instability—measured by one-time wage shocks, cumulative wage shocks, and stable earnings duration—on child maltreatment risk. It also pays attention to the role of safety net programs on buffering the risk of adverse wage shocks on child welfare involvement. I find that experiencing a negative earnings shock of 30% or more increases the likelihood of CPS involvement by approximately 18%. The effect diminishes and becomes nonsignificant when an earnings decline is compensated by benefit receipt. Each additional earnings drop is associated with a 15% greater likelihood of CPS involvement. Each consecutive quarter with stable income is associated with 5% lower probability of a CPS report. The results are more pronounced for abuse than neglect and are marginally significant for neglect reports. The findings suggest that accessing sufficient social benefits as supplemental income when negative earnings shocks occur serves to effectively buffer against the risk of child maltreatment, particularly among families with young children. This study confirms income support as an important instrument to reduce child maltreatment risk; it indicates that policies aimed at boosting income and stabilizing low-income family economics could substantially increase children’s safety and well-being.