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The Impact of Child Support Receipt on Household Income and Labour Supply

Listed author(s):
  • Fisher, Hayley

International evidence suggests that child support schemes provide a small but significant contribution to the household income of lone parents and have modest success in reducing child poverty. There are, however, concerns that receiving child support may discourage labour force participation. I use data from the Household, Income and Labour Dynamics in Australia (HILDA) survey to estimate the effect of receiving child support on government transfer receipt, earned income, hours worked and labour force participation of eligible mothers. OLS estimates of the effect of receiving child support on household behaviour may be biased as a mother's income partly determines the level of support received, and due to the interaction of child support with government transfers. I exploit information about the employment status of a child's non-resident father and find that receiving any child support is associated with a reduction in government transfers, an increase in earned income, and an increase in household income in excess of the amount of child support received. Mothers receiving child support are more likely to be in full time employment, work more hours per week, and are less likely to be out of the labour force.

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File URL: http://econ-wpseries.com/2015/201520.pdf
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Paper provided by University of Sydney, School of Economics in its series Working Papers with number 2015-20.

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Date of creation: Oct 2015
Handle: RePEc:syd:wpaper:2015-20
Contact details of provider: Postal:
Sydney, NSW 2006

Phone: 61 +2 9351 5055
Fax: 61 +2 9351 4341
Web page: http://sydney.edu.au/arts/economics
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  1. Aviv Nevo & Adam M. Rosen, 2012. "Identification With Imperfect Instruments," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 659-671, August.
  2. Daniel R. Meyer & Mei-Chen Hu, 1999. "A Note on the Antipoverty Effectiveness of Child Support among Mother-Only Families," Journal of Human Resources, University of Wisconsin Press, vol. 34(1), pages 225-234.
  3. Samara Gunter, 2013. "Effects of child support pass-through and disregard policies on in-kind child support," Review of Economics of the Household, Springer, vol. 11(2), pages 193-209, June.
  4. Richard B. Freeman & Jane Waldfogel, 2001. "Dunning Delinquent Dads: The Effects of Child Support Enforcement Policy on Child Support Receipt by Never Married Women," Journal of Human Resources, University of Wisconsin Press, vol. 36(2), pages 207-225.
  5. Anna Aizer & ASara McLanahan, 2006. "The Impact of Child Support Enforcement on Fertility, Parental Investments, and Child Well-Being," Journal of Human Resources, University of Wisconsin Press, vol. 41(1).
  6. Maria Cancian & Carolyn J. Heinrich & Yiyoon Chung, 2013. "Discouraging Disadvantaged Fathers’ Employment: An Unintended Consequence of Policies Designed to Support Families," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 32(4), pages 758-784, 09.
  7. H. Elizabeth Peters & Laura Argys & Heather Howard & J. Butler, 2004. "LEGISLATING LOVE: The Effect of Child Support and Welfare Policies on Father–child Contact," Review of Economics of the Household, Springer, vol. 2(3), pages 255-274, 05.
  8. Urvi Neelakantan, 2009. "The impact of changes in child support policy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(3), pages 641-663, July.
  9. Steven Garasky & Susan Stewart, 2007. "Evidence of the Effectiveness of Child Support and Visitation: Examining Food Insecurity among Children with Nonresident Fathers," Journal of Family and Economic Issues, Springer, vol. 28(1), pages 105-121, March.
  10. 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.
  11. Jennifer Roff, 2010. "Welfare, Child Support, and Strategic Behavior: Do High Orders and Low Disregards Discourage Child Support Awards?," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
  12. Maria Cancian & Daniel Meyer, 2014. "Testing the Economic Independence Hypothesis: The Effect of an Exogenous Increase in Child Support on Subsequent Marriage and Cohabitation," Demography, Springer;Population Association of America (PAA), vol. 51(3), pages 857-880, June.
  13. Lenna Nepomnyaschy, 2007. "Child support and father-child contact: Testing reciprocal pathways," Demography, Springer;Population Association of America (PAA), vol. 44(1), pages 93-112, February.
  14. Matthew Gray & Bruce Chapman, 2007. "Relationship break-down and the economic welfare of Australian mothers and their children," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 10(4), pages 253-277, December.
  15. Chien-Chung Huang & James Kunz & Irwin Garfinkel, 2002. "The effect of child support on welfare exits and re-entries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(4), pages 557-576.
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