THE EFFECTS OF CHILD THE EFFECTS OF CHILD SUPPORT RECEIPT ON SUPPORT RECEIPT ON WELFARE EXITS AND WELFARE EXITS AND

REENTRIESREENTRIES

Donald HirasunaDonald Hirasuna

AndAnd

Maureen PirogMaureen Pirog

Purpose of InvestigationPurpose of Investigation

Can Child Support Reduce The Time Can Child Support Reduce The Time Spent On TANF?Spent On TANF?– An Alternative Source Of IncomeAn Alternative Source Of Income

– Help Avoid Time LimitHelp Avoid Time Limit– May Contribute To Smaller CaseloadsMay Contribute To Smaller Caseloads

Findings Regarding Findings Regarding Child Support & Cash Grant MFIPChild Support & Cash Grant MFIP Child Support Increases The Chances Of Exit, Child Support Increases The Chances Of Exit, Especially More Consistent Payments And When Especially More Consistent Payments And When Parents May First Be Considered IneligibleParents May First Be Considered Ineligible

Child Support In Most Recent Months May Contribute To Child Support In Most Recent Months May Contribute To Lower Chances Of Reentry. However, The Results Are Lower Chances Of Reentry. However, The Results Are Less Consistent.Less Consistent.

Parents Sanctioned For Failing To Meet Welfare Rules Parents Sanctioned For Failing To Meet Welfare Rules More Likely Exit And More Likely Return Welfare.More Likely Exit And More Likely Return Welfare.

Child Support Sanctions Increase The Probability Of Exit Child Support Sanctions Increase The Probability Of Exit And Reduce The Probability Of Reentry. And Reduce The Probability Of Reentry.

Parents Who Have Exemptions To Work Requirements Parents Who Have Exemptions To Work Requirements Less Likely To Exit And Reenter Welfare.Less Likely To Exit And Reenter Welfare.

BackgroundBackgroundThe Need For A New StudyThe Need For A New Study

Relatively Few Studies Of The Impacts Of Child Relatively Few Studies Of The Impacts Of Child Support On Welfare Dynamics Post-prworaSupport On Welfare Dynamics Post-prwora– Cancian, Meyer And Wallace (2001)—W2;Cancian, Meyer And Wallace (2001)—W2;– Huang, Garfinkel, And Waldfogel (2004)-state Huang, Garfinkel, And Waldfogel (2004)-state

Level Data;Level Data;

– Miller Et Al. (2005)-survey, Small NMiller Et Al. (2005)-survey, Small N

What Is New In Our StudyWhat Is New In Our Study

Examine Child Support Under The TANF Examine Child Support Under The TANF Era Monthly Data On MFIP Eligibility Era Monthly Data On MFIP Eligibility

Consider When The Dept. Of Human Consider When The Dept. Of Human Services Counts Child Support Income Services Counts Child Support Income For EligibilityFor Eligibility

Examine TANF PoliciesExamine TANF Policies

Monthly Administrative Data Of Monthly Administrative Data Of Minnesota’s MFIP ProgramMinnesota’s MFIP Program

Merge With Monthly Child Support EnforcementMerge With Monthly Child Support Enforcement– Cash Grant MFIP–1992-2003; CSE–1997-2003, And Cash Grant MFIP–1992-2003; CSE–1997-2003, And – Single Parents OnlySingle Parents Only– 3 Part Child Support Order 3 Part Child Support Order

Use 1998-2003 Data To Help Isolate First Spells Use 1998-2003 Data To Help Isolate First Spells – Beginning Of MFIP ProgramBeginning Of MFIP Program

Use 1997 CSE Data Identify Lagged Effects To Child SupportUse 1997 CSE Data Identify Lagged Effects To Child SupportUse Cash Grant MFIPUse Cash Grant MFIP– Includes Time Limits, Sanctions And Work RequirementsIncludes Time Limits, Sanctions And Work Requirements– Excludes Parents Who May Have Been On Food Stamps Excludes Parents Who May Have Been On Food Stamps

Before Who Enter MFIP On Food Stamp Portion OnlyBefore Who Enter MFIP On Food Stamp Portion OnlyInclude Demographic, Policy And Labor Market Variables \Include Demographic, Policy And Labor Market Variables \

DataData

There Are 1,964,539 Person-months In The Data Set. Of There Are 1,964,539 Person-months In The Data Set. Of These 785,380 Reflect Time On Cash Grant Welfare These 785,380 Reflect Time On Cash Grant Welfare And 1,179,159 Reflect Time Off Welfare.And 1,179,159 Reflect Time Off Welfare.

These Data Describe A Total Of 57,913 Independent These Data Describe A Total Of 57,913 Independent Cases.Cases.

Lagged Values Of Child Support Receipt, Sanctions, Lagged Values Of Child Support Receipt, Sanctions, Exemptions, Etc. Are Computed For Each Person-Exemptions, Etc. Are Computed For Each Person-month. The Person-month Data Can Be Aggregated To month. The Person-month Data Can Be Aggregated To 99,803 Spells On Welfare And 50,284 Spells Off 99,803 Spells On Welfare And 50,284 Spells Off Welfare. Welfare.

Tradeoffs Between Administrative Tradeoffs Between Administrative And Multi-state DataAnd Multi-state Data

Advantages/Risks To Administrative DataAdvantages/Risks To Administrative Data– Substantially More Degrees Of Freedom Substantially More Degrees Of Freedom – Monthly Child Support Income And Policy VariablesMonthly Child Support Income And Policy Variables– One Source Of Exogeneity: Can Account For When Human One Source Of Exogeneity: Can Account For When Human

Services Agency Deems Someone IneligibleServices Agency Deems Someone Ineligible– Potential Selection Bias At Individual LevelPotential Selection Bias At Individual Level

Advantages/Risks To Multi-state DataAdvantages/Risks To Multi-state Data– State-by-state Variation In Child Support PolicyState-by-state Variation In Child Support Policy– Many Different Non-child Support Policies That Will Also Require Many Different Non-child Support Policies That Will Also Require

Many Different ControlsMany Different Controls– States With More Generous Child Support Policies May Have A States With More Generous Child Support Policies May Have A

Variety Of More Generous Policies For Low-income FamiliesVariety Of More Generous Policies For Low-income Families– Individual Level Selection BiasIndividual Level Selection Bias

Figure 1: Frequency Distribution of Months Before Receipt of Child Support

0

200

400

600

800

-12 0 12 24 36 48 60

Number of Months Since First Month on MFIP

Numb

er of

Custo

dial

Paren

ts

50% of parents receive Child Support for the first time 21 or more months after they enter TANF

Figure 1 in Handout

Number Of Parents Receiving Number Of Parents Receiving Consistent Payments Decrease Consistent Payments Decrease

With Each MonthWith Each Month

0

20,000

40,000

60,000

80,000

100,000

120,000

1 2 3 4 5 6 7 8 9 10 11 12 or More

Consecutive Months of Receipt

Nu

mb

er o

f R

ecip

ien

ts Among The Times That Parents

Begin To Receive Child 21%

Receive It For At Least 11 Months

In A Row

Table 1 in Handout

Amounts Of Child Support At The Amounts Of Child Support At The 2525thth, 50, 50thth, And 75, And 75thth Percentiles Percentiles

Increase With Consecutive Months Of ReceiptIncrease With Consecutive Months Of Receipt

0

100

200

300

400

500

1 2 3 4 5 6 7 8 9 10 11

12 o

r More

Consecutive Months of Receipt

Am

ou

nt

of

Ch

ild S

up

po

rt

($)

75th Percentile

50th Percentile

25th Percentile

Table 1 in Handout

The Percent Of Parents With Child Support The Percent Of Parents With Child Support Income That Exceeds MFIP Cash Grant Income That Exceeds MFIP Cash Grant Limits Increases With The Number Of Limits Increases With The Number Of

Consecutive PaymentsConsecutive Payments

0%

5%

10%

15%

20%

1 2 3 4 5 6 7 8 9 10 11

12 o

r More

Table 1 in Handout

Theoretical ModelTheoretical Model

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Page 4 of handout

HypothesesHypotheses

LowerHigherEarned Income Credits

LowerExemptions And Extension

HigherSanctions

LowerHigherChild Support

Prob. ReentryProb. ExitPolicy Variable

Empirical ModelsEmpirical ModelsRegression ModelRegression Model

\ \

– SeleCtion Bias Corrections ForSeleCtion Bias Corrections For

More Expected In Child Support And Child CareMore Expected In Child Support And Child CareMore Likely SanctionedMore Likely SanctionedMore Likely Exempt From Work RequirementsMore Likely Exempt From Work Requirements

– Use Instrumental Variables, Because 5 Structural EquationsUse Instrumental Variables, Because 5 Structural EquationsPropensity Score Matching ModelPropensity Score Matching Model

– MAy Be Effectively A Hazard Function If Assume Mean Independence Between MAy Be Effectively A Hazard Function If Assume Mean Independence Between

Baseline Hazard And Propensity Score: Also Must Assume Any Time Varying Baseline Hazard And Propensity Score: Also Must Assume Any Time Varying Covariates For Hazard Function Are Exogenous In Each Period Covariates For Hazard Function Are Exogenous In Each Period T.T.

( ) )()( 01 ,1

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j jjji ++Φ+= ∑∑ ==βαα

( )[ ] ( )[ ]{ }1,,0,,1 01 ==−== iiiiiiiii DtxpDhEtxpDhEEATT

Who Receives Who Receives Less In Child SupportLess In Child Support

Table 2 in Handout

NOn-whites

Those Without A High School Diploma

Low Employment To Population Ratios

RESULTS: EXITSRESULTS: EXITSThe Impact Of Consecutive Child Support The Impact Of Consecutive Child Support

PaymentsPayments

-0.020

0.020.040.060.08

0.1

1 2 3 4 5 6 7 8 9 10 11 12+

Table 3 in Handout

2nD And 3rd Month Largest Effect

2nd Month Statistically Significantly Different From 1st Month (All But 3rd)

2nd Month When First Deemed Ineligible By The DHS

Other Child Support VariablesOther Child Support Variables

Propensity Score Results-2Propensity Score Results-2ndnd Month Of Receipt Month Of Receipt Has Largest Impact On Exits Has Largest Impact On Exits Larger Amounts Of Child Support And Child Larger Amounts Of Child Support And Child Care Makes A Difference In More Recent Care Makes A Difference In More Recent MonthsMonthsA Higher Percent Of Months Of Child Support A Higher Percent Of Months Of Child Support And Child Care Income Received In The Last And Child Care Income Received In The Last Six Months Raises Exit ProbabilitiesSix Months Raises Exit ProbabilitiesMay Suggest That Consistent Payments May Suggest That Consistent Payments Raise Exit ProbabilitiesRaise Exit Probabilities

Tables 3 and 4 in Handout

The Impact Of Sanctions &Other The Impact Of Sanctions &Other TANF PoliciesTANF Policies

1stPolicy

Employment Sanction-10% & 30%

Child Support Sanction-25% & 30%

Exemptions To 60-month Time Limit

?Extension To 60-month Time Limit

Age 60 Or Older

Personal Or Family Health Problem

Child Between 0 & 1Table 3 in Handout

The Impact Of Human Capital, The Impact Of Human Capital, Citizenship & Other VariablesCitizenship & Other Variables

1stPolicy

Full-time Student

High School Diploma Or GED

Noncitizen

Needs An Interpreter

Earned Income Credit

Table 3 in Handout

Hard Skills May Matter

Other FindingsOther Findings

AFrican Americans, American Indians And AFrican Americans, American Indians And Asian Americans Less Likely To ExitAsian Americans Less Likely To Exit

Higher Employment Rates May Raise Higher Employment Rates May Raise ExitsExits

Table 3 in Handout

RESULTS: REENTRIESRESULTS: REENTRIESCan Child Support Reduce The Can Child Support Reduce The

Probability Of Reentry?Probability Of Reentry?

FiRst Few Months Are Most Helpful In FiRst Few Months Are Most Helpful In Reducing The Probability Of ReentryReducing The Probability Of Reentry

More Consistent Payments In Terms Of More Consistent Payments In Terms Of Percent Of Last 6-months That Received Percent Of Last 6-months That Received Payment Reduces The Probability Of Payment Reduces The Probability Of Reentry Onto 2nd EpisodeReentry Onto 2nd Episode

Propensity Score Results->significant In Propensity Score Results->significant In First MonthFirst Month

Tables 4 & 5 in Handout

Consecutive Months Of Receipt Of Consecutive Months Of Receipt Of Child Support Or Childcare And Child Support Or Childcare And

ReentriesReentries

-0.01

-0.005

0

0.005

0.01

1 3 5 7 9 11

Stat. Sig.

Not Stat. Sig.

Largest Deterrent Is In 2nd And 3rd MonthsMay Suggest That Consistent Payments Lower Reentry Probabilities

Table 5 in Handout

Child Support And ReentriesChild Support And Reentries

More In Child Support In Recent Months More In Child Support In Recent Months May Contribute To Longer Times Away May Contribute To Longer Times Away From WelfareFrom Welfare

Higher Percentage Of Payments Within Higher Percentage Of Payments Within Last 6-months Associated With Longer Last 6-months Associated With Longer Spells Away From WelfareSpells Away From Welfare

Medical Support Associated With Longer Medical Support Associated With Longer Spells Away From WelfareSpells Away From Welfare

Table 5 in Handout

The Impact Of TANF Policies The Impact Of TANF Policies On The Probability Of ReentryOn The Probability Of Reentry

1stSubject To The Policy While On TANF

Employment Sanction-10% & 30%

Child Support Sanction-25% & 30%

Extension To 60-month Time Limit

Exempt From Work Requirements

? Age 60 Or Older

Personal Or Family Health Problem

Child Between 0 & 1

Table 5 in Handout

The Impact of Human Capital, The Impact of Human Capital, Citizenship & Other Policy Citizenship & Other Policy

Variables on ReentryVariables on Reentry

1stPolicy

Full-time Student While On TANF

High School Diploma Or GED While On TANF

Noncitizen While On TANF

Needs An Interpreter While On TANF

Earned Income Credit

Table 5 in Handout

Other FindingsOther Findings

African Americans And American Indians African Americans And American Indians More Likely To ReenterMore Likely To Reenter

Employment Growth In The Last Few Employment Growth In The Last Few Months Can Lower The Probability Of Months Can Lower The Probability Of ReentryReentry

Some Evidence That Language Networks Some Evidence That Language Networks For Whites May Deter ReentryFor Whites May Deter Reentry

Table 5 in Handout

ConclusionsConclusions

Child Support:Child Support:− Raise The Odds Of Exit And Lower The Odds Of Raise The Odds Of Exit And Lower The Odds Of

ReentryReentry− Takes Several Months To ReceiveTakes Several Months To Receive− Is Inconsistently ReceivedIs Inconsistently Received− Will Less Likely Help Those With Significant Work Will Less Likely Help Those With Significant Work

BarriersBarriers

Sanctions Raise The Probability Of Exit, But Sanctions Raise The Probability Of Exit, But Only Child Support Sanctions Correlate With A Only Child Support Sanctions Correlate With A Lower Probability Of ReturnLower Probability Of ReturnPersons With Work Or Time Limit Exceptions Persons With Work Or Time Limit Exceptions Less Likely ExitLess Likely Exit