Do State Policies for Low income Families Exacerbate or Mitigate the Horizontal Inequality in Child Support Orders?

Shane Whittington, McNair Scholar

Faculty Mentor: Dr. Maureen Pirog/ Eddie Vargas

School of Public and Environmental Affairs

Indiana University, Bloomington

The manuscript uses 16-years of biannual state panel data to explore the growing disparities in child support orders across states, an important issue as the child’s support is currently the second largest child-focused program behind K-12 education. While there has been a converging consensus about the magnitude of child support orders for middle income families across states, differences in the magnitude of the orders across states has grown for low-income obligors, or alternatively, in cases in which there is not enough money to support two households. There are varieties of reasons for the greatly different child support orders across states for low-income obligors. For instance, many states handle visitation credits differently, as well as minimum orders and imputation of income. This manuscript will describe these differences in state child support guidelines through the years of 1988-2007. How the states approach these issues contribute to interstate variation in child support orders for low-income obligors will be described.

Regardless of the structural mechanisms that give rise to this variation, however, it is possible that in crafting support guidelines that policy makers view all sources of income. Thus, states with more generous tax codes and social benefits for single parents with children may simply require less child support. That is, states with more generous state EITC disability benefits, energy assistance, rent subsidies etc., may require less child support from low-income obligors. Essentially, when the income of the custodial and non-custodial households is simply inadequate, government dollars may be used to substitute for child support from low-income non-custodial parents. Similarly, states with less generous social programs and tax provisions, may ask more of the low-income obligors. If this is the case, the growing interstate variation in child support orders is less of a concern as the inequality among low-income custodial families would be reduced after taking into consideration the other state benefits. The impact on interstate inequality for non-custodial parents, after considering other state programs, is less clear, but is explored in this manuscript. (Pirog, 2007).