Child Support Reform and the Labor Supply of Lone Mothers in the United Kingdom

The reform of child support arrangements, including their treatment by the welfare system, has been on the policy agenda in a number of countries in recent years. This paper simulates the impact of a reform that recently has been implemented in the United Kingdom. The analysis is based on estimates of a model of discrete choice labor supply for a sample of U.K. lone mothers. We suggest that reform will induce a major reduction in welfare expenditures on lone mothers and a significant rise in their labor force participation due to greater work incentives associated with the changes.