Laura Cuesta Daniel R. Meyer

1. Do Child Maintenance Policies Improve Children’s Economic Well-being in Both Developing and Developed Countries? The Case of Colombia and the US Laura Cuesta Daniel R. Meyer Institute for Research on Poverty University of Wisconsin - Madison

2. Overview of talk • Background • Data and Methods • Results • Summary and Next Steps

3. I. BACKGROUND

4. Motivation • Single-parent families prevalent, and increasing • Increased in 24/25 OECD countries between mid-1980s and mid-2000s • Single-parent families economically vulnerable in most countries • Poverty rates quite high, over 30% in mid-2000s in 14 OECD countries (wide range of countries: US, Japan, Mexico, Netherlands)

5. Motivation • Most countries have a variety of policies designed to increase income security for children who do not live with both parents. • Child Maintenance (CM) has the potential to improve children’s economic well-being • But is CM policy working? Is it associated with lower poverty in different types of countries? • Reductions in child poverty by 10 pp in the mid-2000s in 8/22 OECD countries. • Very little is known in developing countries

6. Contributions of this paper • There is no published research on custodial-parent families in Colombia and their economic well-being or their income sources • CM policy may be important at improving the economic well-being of Colombian children in these families - but there is no information • Study focus on two very different countries: • Colombia: very little is known about CM • US: substantial amount is known about CM • This stage of the study is mostly focused on Colombia • US data used as a benchmark

7. Research questions • What is the extent of the problem? • Did custodial-parent families increase during the last decade? • Are they economically vulnerable? • What are child maintenance outcomes? • Do child maintenance policies improve children’s economic well-being in both developing and developed countries? (not done yet)

8. Basic Data: Colombia & US (2008) Source: UNDP 2010 International Human Development Indicators. Poverty defined within each country. Poverty and unemployment rates for Colombia taken from DANE. US poverty rates taken from Census Bureau and US unemployment rates taken from BLS.

9. Child Maintenance Overview Parents separation or divorce Colombia US

10. II. DATA AND METHODS

11. Data

12. Methods • Straightforward Descriptive Analyses • Estimating poverty with and without child maintenance • Family is the unit of analysis: • Custodial parent + her/his children (if single) • Custodial parent + her/his children + partner (if married or cohabitating) • Not making causal claims. Accounting exercise. • Using each country’s official definition of poverty • Emphasizes context of poverty (within-country) rather than trying to do formal cross-country comparisons

13. III. RESULTS

14. What is the extent of the problem in each country? Did custodial-parent families increase during the last decade?

17. What is the extent of the problem in each country? Did custodial-parent families increase during the last decade? YES Are they economically vulnerable?

19. Family Monthly Income (Means) Source: Authors’ Calculations based on QLS (Colombia) and CPS (US). Table shows means among those with incomes greater than zero.

20. Poverty Rates Source: Authors’ Calculations based on QLS (Colombia) and CPS (US). Poverty defined within each country. Figures for total population taken from López & Núñez 2007, DANE-DNP-MESEP (Colombia) and Census Bureau (US).

21. Why are incomes so low and poverty rates so high in Colombia? • Low levels of human capital mean low earnings (and often informal sector work) • 63% (moms) - 68 (dads)% of custodial parents in Colombia are without a secondary (high school) degree • Few other income sources • Relatively low levels of public transfers • One of our questions: are there private transfers that can fill this gap?

22. Child Maintenance Outcomes in Each Country

24. Monthly Amounts Received (Means) Source: Authors’ Calculations based on QLS (Colombia) and CPS (US).

25. What % of Family Income is Child Maintenance? Source: Authors’ Calculations based on QLS (Colombia) and CPS (US).

26. Is Child Maintenance Pulling Some Custodial Parents Out of Poverty in Colombia?

27. Child Maintenance and Poverty Of mothers who are estimated to be poor without child maintenance, what percentage were brought out of poverty after including CM? (Almost no fathers were brought out of poverty) Source: Authors’ Calculations based on QLS (Colombia).

28. Child Maintenance and Extreme Poverty Of mothers who are estimated to be extremely poor without child maintenance, what percentage were brought out of extreme poverty after including CM? (Almost no fathers were brought out of extreme poverty) Source: Authors’ Calculations based on QLS (Colombia).

29. V. SUMMARY AND NEXT STEPS

30. Summary of Results for Colombia What is the extent of the problem? Did custodial-parent families increase during the last decade? YES Are they economically vulnerable? YES What are child maintenance outcomes? Few custodial parents receive; amounts tend to be low; but for those who receive something, it’s a substantial part of their income package

31. Similarities and Differences between US & Colombia Similarities • Higher poverty rates than the total population • Custodial mother families more likely to be poor • Low child maintenance receipt – dads Differences • Growth rate is higher in Colombia (19% Vs 9%) • Poverty rates are substantially higher in Colombia • Child maintenance as a % of family total income is more important for custodial parents in Colombia than in the US

32. Next Steps for this Project • All analyses to date use families as unit of analysis; we plan to focus on children rather than families • We will analyze data on individual families and children in the US (so far only using published tables) • We plan to conduct descriptive regressions that examine characteristics associated with receiving child maintenance and models comparing whether characteristics are the same across the two countries

33. Future Research • What is the potential of child maintenance in Colombia? • Are we already collecting as much as is possible because incomes are so low? • Is there a causal effect of receiving child support? • Is child support more important than other sources of income (perhaps because it has important symbolic meaning)?

34. THANK YOU