Child Support, Consumption, and Labor Supply Decisions of Single-Mother Families
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ORIGINAL PAPER
Child Support, Consumption, and Labor Supply Decisions of Single‑Mother Families Ilyar Heydari Barardehi1,2 · Patryk Babiarz1 · Teresa Mauldin1
© Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract This study estimates the causal effect of child support on consumption and labor supply of single mother families. Using data from the 1999 to 2013 waves of the Panel Study of Income Dynamics and the instrumental variable estimations that control for individual fixed effects, we do not find convincing evidence of significant influence of child support on consumption of custodial mother families. At the same time, we document a statistically significant and quantitatively important negative effect of child support on mothers’ probability of working and the amount of labor supplied. We also find the negative effect of child support on earnings conditional on positive labor income. We conclude that single mothers, especially those with weak attachment to labor force, might value time out of work, perhaps additional time spent with their children, more than the marginal gains in consumption. Keywords Child support · Single mother consumption · Single mother labor supply
Introduction The percentage of children under age 18 living with both parents decreased from 88% in 1960 to 69% in 2016 (U.S. Census Bureau 2016). Almost three out of four children in non-traditional families live with a single mother. Single mothers experience more severe economic and social challenges than two-parent households do. About 40% of femaleheaded families with children lived below the governmentdefined poverty threshold in 2014, while the poverty rate for the more traditional two-parent families with children was 8% in the same year (U.S. Census Bureau 2015). The disadvantaged economic status of single mothers negatively affects the well-being of their children (McLanahan and Booth 1989; Thomson et al. 1994). Previous research * Patryk Babiarz [email protected]
Ilyar Heydari Barardehi [email protected]; [email protected]
Teresa Mauldin [email protected] 1
Financial Planning, Housing and Consumer Economics, University of Georgia, Athens, Georgia
Present Address: Economic Research Institute, Allameh Tabataba’i University, Tehran, Iran
2
has indicated that children’s human capital deteriorates significantly in absence of time- and money-intensive goods and services provided by parents (Becker and Lewis 1974) and poverty experienced during childhood negatively influences both childhood and adolescence well-being, whether measured as physical or emotional health, cognitive development, or school performance (Brooks-Gunn and Duncan 1997; Duncan et al. 2010). The concerns over prevalence of single-motherhood and its negative economic consequences has led policymakers to impose obligations on both biological parents to financially contribute to their child’s living expenses. The Child Support Enforcement (CSE) program enacted in 1975 is a collection of federal and state laws designed to
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