Association for Public Policy Analysis & Management

Child support is a key income source for families that receive it (Sorensen, 2010). Yet more than half of custodial parents with orders receive less than the full amount of support due and 30 percent do not receive any support at all (Grall, 2018). The considerable labor market disadvantages faced by many parents behind in their child support payments has led to a growing interest in identifying ways that the child support system can support noncustodial parents in making formal contributions to their nonresident children.

This paper examines unemployment insurance (UI) benefits as a potential resource available to child support agencies to support noncustodial parents with employment difficulties. In theory, receipt of UI benefits may help noncustodial parents experiencing employment difficulties continue to meet their child support obligations. Not only do UI benefits provide a source of cash income, under federal law, state child support agencies can collect up to 50 percent of unemployment insurance benefits received by noncustodial parents toward child support owed on IV-D cases. In practice, take-up of UI is quite low—particularly among low-income workers who may face barriers in accessing UI benefits related to their limited connections to the formal labor market, reasons for exiting employment, and lack of knowledge of the program—which may limit the role of the program in improving child support outcomes.

In order to learn more about the relationship between unemployment insurance and child support payments and compliance, this paper uses administrative data from noncustodial parents who participated in the Noncustodial Parent Child Support Employment Demonstration (CSPED), a federally funded eight-state intervention for noncustodial parents behind in their child support payments and experiencing employment difficulties. Drawing from the rich employment and child support data available from CSPED, I identify 5,009 parents who were behind in their child support payments, experiencing employment difficulties, and eligible for UI benefits at enrollment. I follow these fathers for up to eight calendar quarters and use fixed-effects models to examine how receipt of UI is related to changes in child support payments and compliance over time and net of the time-invariant unobserved characteristics of these parents that likely influence UI take-up and child support outcomes.

Preliminary findings suggest that UI receipt is associated with increases in child support payments and compliance. Given some evidence that the benefits of UI extend beyond workers themselves and can be a source of economic support for children living apart from the parent receiving benefits, the study highlights the importance of strengthening connections between child support and the UI program and of expanding disadvantaged workers' access to UI benefits.