Long-term Impacts of Child Support: A Cohort Study

Family plays a major role in shaping a child’s educational attainment and adulthood achievements. The innate abilities inherited through genetic endowments, as well as the early-life material and economic resources, are considered to be among the important determinants of adulthood achievements. Heterogeneity in individual endowments and childhood resources explains the discrepancies among children regarding their human capital accumulation. Children of parents with high levels of human and material capital are more likely to become economically successful (Becker & Tomes, 1997). Previous studies document that the shortage of economic resources affects a child’s skill development and achievements during both childhood and adulthood (Haveman & Wolfe, 1995). Recent socioeconomic statistics released by the U.S Census Bureau show that about 40 percent of single mothers were below the official poverty level in 2014 (Current Population Reports, 2016). Poverty is a frequent outcome when a single mother is a sole breadwinner for her family, and her work duties interfere with parenting responsibilities. A number of studies examine the deficiencies in human capital accumulation associated with single motherhood. The majority of these studies document a negative association between childhood poverty and children’s educational attainment (e.g., Krein & Beller, 1988; Astone & McLanahan, 1991; Ladd, 2012). Literature also suggests that policies that provide supplementary income for disadvantaged families play a significant role in attenuating adverse human capital consequences of childhood poverty (Knox, 1996). Thus, anti-poverty transfers that target lowincome single mothers could generate favorable impacts on recipient children’s quality of life and attainments. The federal government enacted the Child Support Enforcement (CSE) program – a set of regulations and associated bureaucracy that attempt to elicit financial contributions from absent fathers to their children. From a conceptual point of view, a child support payment is similar to a public transfer that expands the recipient family’s economic resources. The literature argues that the child support transfer enhances early childhood skills and development, and thus partially remedies the problem of resources inadequacy among children growing up in one-parent families (Argys, Peters, Brooks-Gunn, & Smith, 1998; Nepomnyaschy, Magnuson, & Berger, 2012). This leads to a common-sense presumption that a child support transfer produces longlasting effects on the recipient as measured by adulthood achievements. However, the literature offers no convincing analysis or evidence on the enduring effects of non-custodial fathers’ financial contributions to the recipients’ future success and well-being. In this essay, we attempt to fill this void using data extracted from the 1997 cohort of the National Longitudinal Survey of Youth (NLSY97). In particular, we extend the literature by identifying and measuring the lasting effects of child support transfer on recipients’ educational attainments, labor market outcomes, and socioeconomic status in the early adulthood. We use the 1997 cohort of NLSY to investigate lasting impacts of CSE policy. Our analysis sample is restricted to individuals who received child support payment up to the age of 18 or were potentially eligible for child support (i.e., were living in a single-mother household and their father was alive). We follow this cohort of children until they reach age 24-28 when we obtain the measurements of the key dependent variables (measures of early adulthood achievement) We examine the impact of child support on various types of outcomes, each representing a unique aspect of an individual’s success. The first set of dependent variables represents human capital accumulation outcomes, including educational attainment. The level of education is measured by two binary indicators of high school and college completion, respectively. The second set of dependent variables represents young adults’ employment and economic well-being. A dichotomous variable, separating employed individuals from unemployed ones, measures the adulthood employment status. Another achievement outcome, which will be measured by the poverty ratio, captures the young adults’ economic well-being. The measures of educational attainment are time-invariant once an individual has