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Effects of child support pass-through and disregard policies on in-kind child support

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Abstract

This paper examines whether states’ elimination of child support disregards for welfare payments after welfare reform caused non-custodial parents to increase in-kind support. I use longitudinal data from the Survey of Program Dynamics and take advantage of state and year variation in child support disregard policies before and after the 1996 welfare reform to identify effects of the disregard on in-kind support. I find that a $100 decrease in the disregard corresponds to a 3.2 percentage point increase in the probability a child will receive in-kind child support.

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Notes

  1. That is, states now had to cover the federal government's share of welfare costs. Prior to 1996, the cost of the mandatory $50 pass-through and disregard was split between the federal and state governments according to the Medicaid funding formula.

  2. See, for example, Sorensen and Hill (2004); Cassetty et al. (2002); and Cancian et al. (2007).

  3. Wisconsin’s program divided participants into four groups based on work experience. Participants in the top two groups did not receive cash benefits, so mothers who were subject to the disregard rules and received welfare were least able to exit welfare and their partners may have been more likely to pay child support informally regardless of the disregard amount.

  4. These are 1992 topical modules 6 and 9 and 1993 topical modules 3, 6, and 9.

  5. The ideal unit of observation would be the set of fathers with which mothers have children. However, I cannot identify which children have the same father in the data.

  6. The sample is not changing due to participation in the child support system because the sample includes all children with a parent outside the household regardless of whether they have a formal child support order. The sample does change as some children age out of the child support sample and new children enter when they are born or their father leaves the household.

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Acknowledgments

I thank Charlie Brown, Adam Cole, Sandy Danziger, Taryn Dinkelman, Ann Ferris, Ben Keys, Joel Slemrod, and Jeff Smith for helpful comments and suggestions. I am especially grateful to Maria Cancian and Dan Meyer for generously sharing state-level data on state child support pass-through and disregard policies. Sherrie Kossoudji provided invaluable help merging SIPP and SPD files. All errors and omissions are my own.

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  1. Department of Economics, Colby College, 5230 Mayflower Hill, Waterville, ME, 04330, USA

    Samara Potter Gunter

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  1. Samara Potter Gunter
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Correspondence to Samara Potter Gunter.

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Gunter, S.P. Effects of child support pass-through and disregard policies on in-kind child support. Rev Econ Household 11, 193–209 (2013). https://doi.org/10.1007/s11150-012-9140-2

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