Interrelation of child support, visitation, and hours of work

Monthly Labor Review, June, 1992 by Jonathan R. Veum

Young mothers who receive child support payments are more likely to work than nonrecipients and are apt to work longer hours and have higher earnings if their children are visited by the father; young fathers who pay support are more likely than nonpayers to visit their children

The composition of families has changed significantly over the past 15 to 20 years. Particularly, the percentage of families that were headed by women grew from 21.1 percent to 31.1 percent from 1970 to 1988. The growth in the number of such families is occurring for two reasons. First, there has been a large increase in marital separation and divorce. The percentage of divorced women aged 18 or older increased from 4.3 percent in 1970 to 13.9 percent in 1988. Second, there has been a sharp rise in the number of unwed mothers, as the frequency of births to unwed mothers increased from 26.4 percent in 1970 to 38.6 percent in 1988.[1]

Consequently, financial support, and the lack of it, for children who live apart from their fathers is of increasing concern. In 1987, only 3.7 million of the 9.4 million women with own children under age 21 whose father was absent received child support. In addition, about one-third of these women had incomes below the poverty level, and data show that many families in poverty receive welfare payments.2 Hence, a contributing factor to the incidence of poverty and welfare dependency of custodial parents is inadequate fmancial support received from the absent parent.

The economic situation of women with children, combined with the lack of support payments by absent fathers has led to Federal legislation aimed at collecting money from these fathers. The Child Support Enforcement Amendments of 1984 requires each State to establish guidelines for determining child support awards, and the Family Welfare Reform Act of 1988 requires States to provide by 1994 wage withholding for all new orders for child support awards.

Child support reform is expected to affect a number of issues involving parents, such as visitation rights of noncustodial parents, custody, welfare dependence, labor force participation, divorce, remarriage, and the decision to have a child? This article examines the interrelationship between child support payments to custodial mothers, visitation of noncustodial fathers, and annual hours of work of the parents. These three activities are interdependent and also affect the economic well-being of parents and their children. Data are from the 1988 National Longitudinal Survey of Youth (Youth Survey), an ongoing longitudinal survey sponsored by the Bureau of Labor Statistics.4 The Youth Survey provides annual information on a sample of young women and men who were 14 to 22 years old in 1979. In 1988, the sample, which includes an overrepresentation of blacks, Hispanics, and economically disadvantaged whites, had 10,466 respondents. In all computations, weights are used to adjust for different sampling rates and nonresponse rates, so that the data are nationally representative of the age group.

Background and issues

A 1982 study by Allyson Sherman Grossman and Howard Hayghe indicates that the receipt of child support payments is positively related to labor force participation.5 This finding seems somewhat surprising because one might assume that income transfers would reduce the hours of work of mothers. However, receipt of child support is complicated by the fact that if the individual also receives welfare benefits, welfare payments are reduced by nearly the entire amount of the child support payment, meaning that a mother who receives welfare may not be any better off financially after receiving child support payments.6 Yet, if child support payments could entirely replace welfare benefits, the incentives to work would increase, because welfare benefits contain a large marginal tax on earnings, while child support payments do not. However, for mothers not on welfare, an increase in child support payments will increase nonlabor income, which generally reduces hours of work.

A 1989 study by John Graham and Andrea Beller indicates that, after controlling for' the complications induced by the welfare system, child support payments reduce hours of work, but by a much smaller magnitude than other forms of nonlabor income.7 Graham and Beller speculate that child support may be different from other nonlabor income for two reasons. First, women who receive child support payments may use this income to purchase commodities that can substitute for time at home, such as child care services, thus allowing them to increase their hours of work. Second, because many fathers only partially comply with child support awards or do not comply at all, mothers may view child support as a risky income source, and consequently regard it as not having the same negative effect on their hours of work as other more guaranteed forms of nonlabor income.

The hours of work and earnings of absent fathers are also affected by changes in the way child support is awarded and collected. When an award is set by the court, the size of the payment is often based at least partially on the father's earnings. In cases that involve wage garnishment, the payment is collected through payroll withholding in the same manner as Social Security and income taxes. Consequently, an absent parent' s labor force activity is interrelated with child support payments.