Unemployment and Child Support Compliance through the Great Recession

Elia De la Cruz Toledo, Columbia University
Ronald B. Mincy, Columbia University

Using previously unavailable data of fathers' residence from the Fragile Families and Child Wellbeing Study and multiple imputation techniques, we estimate the reduced-form association between aggregate unemployment and child support compliance, from 1998 to 2010. Previous studies used unemployment rates at mothers' location to represent relevant labor market conditions finding no significant results. Using a fixed effects panel logit model, we found that the association between aggregate unemployment and child support compliance is negative, but sensitive to the unemployment specification. A one percentage-point increase in unemployment at father's location is associated with a 6 percentage-point decrease in the probability of complying with child support obligations. The association of the unemployment rate at mothers' location is weaker and not statistically significant. Thus, using a measure of unemployment at mothers' and not at fathers' labor markets provide inaccurate estimates of the effect of unemployment on compliance that reflect attenuation bias.