Till Lawsuit Do Us Part: Variations in Child Support Legislation and Labor Force Participation

In this work I estimate the effect of child support payments both on labor outcomes for both custodial and non-custodial parents. As in the USA divorce legislation is set on the state-level, there is high variation in the average amount of child support. I perform analysis both on state and individual-level, using data from Bureau of Labor Statistics and IPUMS-CPS respectively. Moreover, I prepare an estimation of average child support rate in each state. I estimate OLS equations using clustered standard errors, and find that income from child support negatively influences labor supply of custodial parents for sample of eligible people. Also, I estimate the effect separately for custodial parents of different sexes. In a series of robustness checks, I also find that these findings are stable under a variety of possible controls. Finally, I find negative influence on non-custodial parents labor supply although there is some variation in significance level between different specifications.