Panel Paper: The Minimum Wage and Fathers’ Provision of Child Support: Findings from National Data.

Friday, November 8, 2019
Plaza Building: Concourse Level, Plaza Court 7 (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Daniel Miller1, Margaret M. C. Thomas1, Allison Dwyer Emory2, Lenna Nepomnyaschy3 and Maureen R. Waller4, (1)Boston University, (2)University at Buffalo, (3)Rutgers University, (4)Cornell University

In 2015, there were approximately five million custodial mothers with children who were supposed to receive child support from a nonresident father (Grall, 2018). Only 44.9% of these mothers and 37.8% of low-SES mothers with a high school education or less received the full amount of support due to them (Grall). In the wake of Welfare Reform, the receipt of cash child support has become increasingly important to low-SES families (Meyer & Cancian, 2019): for custodial mothers living in poverty who received all the support due to them, child support made up over 58% of their household income (Grall, 2018).

Because of the importance of cash child support to low-SES custodial mothers, increasing compliance with child support orders is a primary goal of policymakers. Research suggests that deteriorations to the economic circumstances of low-SES fathers over the past decades has damaged their ability to provide for their children. However, few studies have investigated whether policies not specifically focused on child support can affect low-SES men’s provision of child support. To address this limitation, this study uses nationally representative data to investigate whether increases in the minimum wage are associated with changes in child support compliance.

Our study uses pooled data from the 1994-2016 waves of the Current Population Survey Child Support Supplement, a biennial, nationally representative survey that collects rich data on families potentially eligible for child support. We restrict our sample to 37,912 custodial mothers with high school educations or less, whose partners’ provision of child support should be most susceptible to changes in the minimum wage. We merge data on the real value of the state minimum wage (lagged by one year) based on the non-custodial father’s state of residence (UKCPR, 2018).

We estimate whether the state minimum wage is associated with changes in a variety of child support compliance measures: the real dollar amounts of total cash, formal, and informal support received; indicators for the receipt of any formal or any informal child support and non-cash (in-kind) support; and the proportion of support received out of support due. To address endogeneity in linear regression models, we control for state and year fixed effects, state-specific linear time trends, and individual-level sociodemographic factors.

We find that among custodial mothers due support, each one-dollar increase in state minimum wage levels is significantly associated with a $170 annual increase in formal cash support received by mothers. This amounts to about a 6.5% increase in the average amount of support received by mothers with a high school education or less (Grall, 2018). For the same group, each dollar increase was also associated with marginally significant (p<.10) increases in receipt of total cash support and in the probability that mothers received any formal cash support. Robustness tests found no significant associations between the minimum wage and child support receipt reported by higher-education mothers. Our findings suggest that amidst other approaches designed to help fathers support their children, attention to policies that can help bolster their economic security may also be effective.