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A child-support assurance program: How much will it reduce child poverty, and at what cost?
Persistent child poverty and awareness that noncustodial parents contribute to this problem by failing to pay child support has spurred interest in a national child-support assurance program (CSAP). We analyze several variations of a CSAP and find that the policies considered have a limited impact on child poverty. Moreover, the alternative which reduces child poverty the most does so at a high cost. Today, one in five children lives in poverty and over half of these children live in families with a parent living elsewhere. Yet, many of these children do not receive income from their noncustodial parent. Several recent proposals offered in Congress would establish a national or demonstration assurance program, whereby the government would pay a benefit to children when child support is not received. A child-support assurance demonstration project was also included in the final recommendations of the bipartisan National Commission on Children (1991). This paper examines the extent to which a national CSAP would reduce child poverty and at what cost. We use the Urban Institute's unique microsimulation instrument, the Transfer Income Model version 2 (TRIM2), to estimate the costs and effects of this policy using 1990 data. I. Designing a Child-Support Assurance Policy