Child Support and the Economy.

September 2005

Maria Cancian, Institute for Research on Poverty, La Follette School of Public Affairs and School of Social Work, University of Wisconsin–Madison and Daniel R. Meyer, Institute for Research on Poverty, School of Social Work, University of Wisconsin–Madison.

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Abstract

As the proportion of children living with both parents has fallen and as public support for sole-parent families has been reduced, child support has become a crucial source of income for single-parent families. In this chapter we describe the logic and outcomes of the child support system and consider the relationship between economic conditions, child support, and poverty. We show that child support is an important, if often unreliable, source of income for poor single-mother families. But mothers with limited earnings potential often have had children with men who also have limited economic resources. This constrains the potential for child support to lift families out of poverty—since child support payments may constitute a transfer from one poor household to another. Moreover, parents who live in separate households lose the economies of scale associated with shared housing and other resources, and therefore are at an economic disadvantage relative to two-parent households, regardless of their individual incomes. Finally, child support policies themselves have been formulated with sometime contradictory objectives—including supporting families, and offsetting the costs to government of public supports. This has contributed to a system with complex incentives that may have unintended consequences for economically vulnerable and otherwise fragile families, many of whom may have difficulty managing the system to the best advantage of their children...



Keywords:
Child Support, Marriage, Family Formation and Reproductive Issues