Child support policies have been shown to have modest but important effects on reducing child poverty in several countries. In Australia, child support transfers can make up as much as 20% of the household income of mothers after relationship breakdown. Estimating the effect of receiving child support on household behaviour is not straightforward due to interactions with government transfers and the fact that the mother’s income is used in the calculation of the level of child support. I estimate the effect of receiving child support on the labour supply and welfare receipt of separated mothers in Australia by exploiting information about the past employment status of a child’s non-resident father. I find that receiving more child support transfers is associated with a reduction in the amount of government transfers received, an increase in household labour income, and an increase in gross household income in excess of the amount of child support received. Mothers are more likely to be in full time employment and less likely to be out of the labour force. Household expenditure data suggests that higher child support payments are associated with an increase in spending on alcohol and a shift from public to private transportation.
Presented by:
Hayley Fisher (University of Sydney)
Date & time:
March 16, 2015 4:00 pm - March 16, 2015 5:30 pm
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