1. 1 Welfare & Child Support: Lessons from the Child Support Demonstration Evaluation Maria Cancian & Daniel R. Meyer Institute for Research on Poverty University of Wisconsin University of Michigan National Poverty Center June 25, 2003

2. 2 Outline Policy Context –Child Support and Welfare Policy –TANF and Wisconsin Works (W-2) Design Selected Results Policy Implications

3. Child Support Demonstration Evaluation (CSDE) PIs: Daniel R. Meyer & Maria Cancian CSDE Phase I Collaborators: Analysts: Judi Bartfeld, Judith Cassetty, Thomas Corbett, Robert Haveman, Thomas Kaplan, David Pate, Arthur Reynolds, Gary Sandefur, Nora Cate Schaeffer, Judith Seltzer, Barbara Wolfe, James Ziliak Staff & Programmers: Patricia Brown, Emma Caspar, Margaret Krecker, Steven Cook, Allison Espeseth, Zhichun Jing, Dan Ross, Cynthia White, Lynn Wimer R.A.s: Danna Basson, Royce Hutson, Danielle Jones, Sangeun Lee, Victoria Mayer, Sheri Meland, Shauna Morimoto, Tymofiy Mylovanov, Hwa-Ok Park, Hyunjoon Park, David Reznichek, Christine Schwartz, Scott Scrivner, Paul Shattuck, Marya Sosulski, Sara Wakefield, Chi-Fang Wu NAB: Andrea Beller, Glen Cain, Greg Duncan, Kathryn Edin, Vivian Gadsden, Irwin Garfinkel, Nancy Mathiowetz, Marygold Melli, Ronald Mincy, Elaine Richmond, Robert Willis

4. 4 Wisconsin’s TANF program:W-2 W-2 designed to mirror entry level employment 12 week exemption for child birth (Caretaker of Newborn) First check designed to follow work Less pay for less work (sanctioned at minimum wage for each hour missed) Payments do not vary by family size Payments are not reduced if participant receives child support

5. 5 Child Support/TANF Policy Options Government keeps all child support paid on behalf of welfare recipients to offset welfare costs; –MOST STATE TANF PLANS (since 1996) Government passes through a portion of child support to increase incentive to cooperate with formal system; –UNIVERSAL SINCE 1984 (OR BEFORE) –ABOUT 1/3 STATE TANF PLANS (since 1996) Government passes through all child support and disregards it in the calculation of benefits –UNIQUE TO WISCONSIN

6. 6 Evaluating the Impact of a Full Child Support Pass-through and Disregard: Components of the CSDE Phase I Implementation/process analysis Experimental analysis: –Cases randomly assigned to different child support policies –Phase I includes cases that entered W-2 (from AFDC or directly) from its implementation in 9/97 through early 7/98 Complementary Non-Experimental analyses: –Cases facing different policies in different states and years –Ethnographic study of Black fathers in Milwaukee

7. 7 W-2 CSDE Experimental Design “Experimental” group (E): pass-through and disregard of 100% of current child support paid “Control” group (C): pass-through and disregard of greater of $50 or 41% of child support paid per month –partial pass-through applies only to those receiving cash assistance (in “lower tiers” of W-2) –at least as generous as AFDC ($50/month) gives families entire state share limited “policy relevance”; in most states there is no disregard Note: “Controls” are the exception; most W-2 participants receive full pass-through (experimental treatment)

8. 8 W-2 CSDE Design

9. 9 Primary Data Sources Administrative Data –CARES (W-2 payments and other benefits, basic demographics) –KIDS (Child Support orders and payments) –UI (mothers’ and fathers’ earnings) –N= 15,977 mothers; 12,502 Experimental & 3,475 Control Survey of Wisconsin Works Families –Two waves: Spring, 1999, Spring 2000 –3000 Resident Mothers and one father –Response rates: Mothers: 82%, 82% Fathers: 33%, 33% overall; 43%, 46% for full-effort sub-sample eligible for in-person interviews Survey of W-2 & CS Workers Focus groups and multiple in-depth interviews for ethnographic component

10. 10 Experimental Impact Study Treatment: Changes in child support received and child support retained Primary Impact Areas: –Paternity establishment & child support orders –Child support paid & received Potential Secondary Effects: –W-2 participation & costs –Mothers’ and fathers’ earnings & employment –Fathers’ involvement; informal transfers –Child well-being Subgroups of special interest: mothers in lower tier, and mothers without recent welfare history

11. 11 Summary of Main Findings Direct Effects –Mothers in the Experimental group receive more Child Support $120-140/year over all mothers larger for those in lower tier, and new to the welfare system Primary Effects –Fathers of children in the Experimental group more likely to pay support Small effect over all fathers (2-3 percentage points) Larger effects for cases in which mother was new to the welfare system. –Some evidence of higher payments –Some evidence of faster paternity establishment –No effect on overall government costs; less child support retained among Es is offset by lower benefits

12. 12 Percentage of Nonresident Fathers Paying Child Support

13. 13 Average Annual Amount of Child Support Paid Among All Nonresident Fathers

14. 14 Average Annual Amount of Child Support Received Among All Resident Mothers

15. 15 Paternity Established Among Non-Marital Children Without a Legal Father at W-2 Entry

16. 16 Average Total Costs From Program Participation

17. 17 Average Amount of Child Support Retained by the State

18. 18 Average Amount of Total Governmental Costs

19. 19 Summary of Secondary Effects Suggestive finding that E’s who enter in a lower tier move off W-2 more quickly No consistent effects on moms’ employment/earnings except suggestive finding that E’s have higher wages No consistent effect on dads’ formal employment and earnings; E dads have less informal employment No consistent effects on contact; suggestive findings for less conflict among E’s with child support orders E moms more likely to receive higher-valued informal support in 99, possibly because of reduced conflict No consistent effect on child well-being, except E’s less likely to have health limitations

20. 20 Selected Limitations of Impact Analysis Limited intervention may have led to smaller effects: –Problems with implementation: Experiment not emphasized or well understood by caseworkers, especially in Milwaukee (lost in the massive changes) Experiment not well understood by participants: –About ¼ of mothers in Experimental group understood that they were eligible for full pass-through and disregard –About ½ of mothers understood they would receive all child support if they were not receiving cash benefits –Fathers know less –Control group receives very generous treatment; Experimental group still has some support retained –E-C difference relevant only when in lower tiers of W-2; most families move out quickly –Limited timeframe/difficulty of changing old patterns

21. 21 Conclusions When their children directly benefit: –fathers are more likely to pay support –mothers and fathers more likely to cooperate with the system Anticipated short-term government cost savings from child support retentions may not be realized, and result in long-term loss of support to children => increase child support pass-through/disregard Children with poor mothers often have poor fathers  difficult to make “reasonable” demands on fathers in a world without a welfare entitlement.

22. 22 Available on IRP Web Site (http://www.ssc.wisc.edu/irp/) REPORTS: –W-2 CSDE Phase I Final Report (4/01) Vol 1: Effects of the Experiment Vol 2: The Well-Being of W-2 Families Vol 3: Technical Reports –W-2 CSDE Report on Nonexperimental Analyses (3/02) Vol 1: Comparative Summary of Quantitative Nonexperimental and Experimental Analyses Vol 2: Fathers of Children in W-2 Families Vol 3: Quantitative Nonexperimental Analyses; Background Reports –W-2 CSDE Phase II Final Report (Summer 2003) –Next Steps: CSDE III funded for 2003-2006 DATA: –Codebook and information on Public Use versions of Survey and Administrative data