Incorporating labor supply responses into the estimated effects of an assured child support benefit

Assured child support benefits are an important component of many proposals to reform the child support system. The authors estimate the likely effects of assured benefits on poverty and welfare participation when (a) parents eligible for child support work the same number of hours as they currently work and (b) parents eligible for child support change the number of hours they work in order to maximize their income and leisure time. They find that in each situation assured benefits will reduce poverty rates and the poverty gap; welfare caseloads and expenditures will also fall. When parents are allowed to change the number of hours they work, the impact of assured benefits will be about the same, but the costs of the assured benefit program will increase.