Two demographic phenomenon that have affected the wellbeing of children in recent decades are 1) the increase in labor force participation rates of mothers with young children, leading to a concern about the quality, cost, and availability of child care, and 2) the increase in divorce rates that has increased the proportion of children who live in single parent families and has contributed to increasing poverty rates for children. This proposal describes two separate projects relating to these issues. The first part of the proposal explores the relationships between child support awards, the non-custodial parent's (NCP) willingness to pay child support, state enforcement efforts, and compliance with the awards. We develop a game-theoretic bargaining model of child support awards and payments that is based on the idea that some NCPs will be willing to pay child support because they care about their children's wellbeing, while others will require government enforcement to insure full compliance. An NCP's willingness to pay will depend on the level of altruism towards his children and on any agreement regarding the level of total expenditures on the children that he can make with his ex-spouse. Thus compliance will be a function of the parent-parent relationship, the parent-child relationship, the minimum award level specified by law, and government enforcement efforts. We use data from the Stanford Child Custody Study and Adolescent Followup and from the National Longitudinal Surveys of Labor Market Behavior of Youth (NLSY) to provide estimates of the level of parental altruism towards their children and the degree to which greater child support payments are due to self-enforcing agreements, higher child support guidelines or greater government enforcement efforts. The second part of this proposal investigates the effect of the Child Care Tax Credit (CCTC) in the U.S. income tax system on the labor supply decisions of mothers with young children and on the choice of child care. We utilize a household production framework to develop a static model of labor supply and child care choice. The CCTC subsidizes both the number of hours of child care purchased and the per hour cost or price of child care. The subsidy rate differs by the income level of the family. We exploit the price variation caused by this structure to estimate the effect of child care costs on women's labor supply and the choice of hourly expenditures on child care. We also examine the distributional impact of the subsidy. Is there a differential impact of the subsidy by the age of the children, the education of the mother, or the socio- economic status of the family? Finally we incorporate several child care programs that are targeted at the low income population. Our estimation methodology allows us to use our results to do simulations of the effects of various policies on labor supply and child care choice. Data from the 1986, 1988, and 1989 waves of the NLSY are used to estimate the model.
| Rendall, M S; Clarke, L; Peters, H E et al. (1999) Incomplete reporting of men's fertility in the United States and Britain: a research note. Demography 36:135-44 |
| Argys, L M; Peters, H E; Brooks-Gunn, J et al. (1998) The impact of child support on cognitive outcomes of young children. Demography 35:159-73 |
