Emphasis on renewed individual responsibility increased as policy makers reduced the availability of public assistance. To what degree will private transfers replace shrinking welfare benefits? The answer to this question is crucial in an era of binding welfare constraints and is central to the research in this application. We propose to investigate the relationship between kin support, child support and welfare. Although studies have examined the incentives for child support and kin support separately, little work has been done to examine the interrelationship between these sources of financial support for children in single-parent families. To integrate these decisions, we extend theoretical models of altruistically motivated inter-vivos transfers. This model formalizes the notion that increases in one type of income will reduce the incentives for other transfers, and highlights the role of welfare and child support policies in these decisions. We will use national micro data from the Panel Study of Income Dynamics (PSID). In addition to sociodemographic information on children and their resident parent, the PSID surveys include reports of monthly receipt welfare, child support, and financial support from relatives. Household rosters reveal co-residence. We will extract samples of households that include children with a non-resident father. Geographic identifiers in the PSID, available by special arrangement, allow us to link these households with state policies regarding welfare eligibility and generosity, and the efficacy of state child support collection. These data will allow us to answer five important questions: 1) What is the relative importance of welfare, child support and kin support to children with anon-custodial father?, 2) How frequently do families receive these multiple sources of income and support, and in what combination?, 3) Does the receipt of one type of financial support reduce the probability of the receipt of the others and by how much?, 4) Do child support and kin-support respond to exogenous changes in welfare generosity and availability?, and 5) Is kin co-residence related to child support and welfare? To answer these questions, we estimate a simultaneous system of equations. The answers to these questions are important in an era of decreased public support. In addition to the concern that low levels of income place children at risk of low educational attainment, poor health outcomes and greater risk of non-marital pregnancy, the composition of income may also have implications for child well being.
