Giving Noncustodial Parents Options:  Employment and Child Support Outcomes of the SHARE Program:

III. Program Outcomes

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Contents

1. Characteristics of the NCP Sample Before Referral to SHARE
2. How Did Targeted NCPS Fare after Referral to SHARE?
3. What Can We Conclude from These Findings?
4. Summary and Study Conclusions

Endnotes

The main objective of SHARE was to help NCPs increase their employment, earnings, and ability to pay child support. This study examines whether NCPs did work more, earn more, and pay more support after they were exposed to the initiative. Because the study is not experimental — it does not entail randomly assigning sample members to a treatment or control group — we cannot establish definitively whether, or to what extent, SHARE itself is responsible for any of the observed changes in these outcomes over time. However, the study's design does allow us to establish the extent to which the initiative's intended outcomes were being achieved, and whether observed changes could plausibly be related to program effects.

Although the NCPs in this study shared some common characteristics and experiences, they followed a variety of paths after they were referred to SHARE. Some never appeared at a contempt hearing, and those who appeared may or may not have been referred for WtW services. It is reasonable to expect that whether NCPs appeared at contempt hearings, and whether they were referred to WtW services, may be associated with employment, earnings, and child support payment outcomes.

Many factors may have influenced the paths that NCPs took. Preexisting differences in backgrounds, motivation, and capabilities — unobserved in the available data — could have affected how NCPs responded to SHARE, as well as their employment and child support outcomes. Because individuals targeted by programs such as SHARE usually are at a low point in their employment and other aspects of their lives when they are first engaged in services, post-referral outcomes are likely to reflect a certain amount of "natural recovery" from these lows.⁽¹³⁾ Finally, the various components of SHARE may have affected individual NCPs differently.

This chapter first describes the characteristics and experiences of NCPs in the study before their exposure to SHARE. It then explores changes in the participants' labor market and child support experiences after referral to SHARE, as well as differences in outcomes for NCPs who took different paths through the initiative. It concludes with a discussion of factors that may have contributed to the observed differences and implications for future research.

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A. Characteristics of the NCP Sample Before Referral to SHARE

As context for examination of employment, earnings, and child support outcomes, it is useful to understand the backgrounds of the NCPs referred to SHARE. A basic description of the pre-referral characteristics and experiences of NCPs can provide a backdrop for interpreting the responses of these individuals to the initiative.

Most NCPs were male, and they were older than age 25 when referred to SHARE. Based on the limited demographic data available, we can construct a rudimentary profile of the NCPs referred to SHARE. Most NCPs included in the study (88 percent) were male (see Appendix Table A.1).⁽¹⁴⁾ Their average, as well as median, age at the time of referral toSHARE was 31 years. Fewer than one-quarter were younger than age 25 at referral, and there were few teenagers or people age 45 or older (five and six percent, respectively) (Figure III.1).

Rates of participation in TANF were low. No more than seven percent of the NCPs in the study were receiving TANF in any of the four quarters before referral to SHARE (Table III.1).

This finding is not surprising, given that only needy children and their residential caretakers may receive TANF. Still, some NCPs in our sample may have been receiving TANF, for one of two reasons. First, our analysis of patterns of participation in SHARE revealed a number of NCPs who were never referred to a WtW provider because YCPA staff discovered at the contempt hearing that the noncustodial children were at that time living with them (see Chapter II). Some of these NCPs may by then have been receiving TANF for themselves and for these children, although earlier they had been under order to pay support to the other parent. Second, some NCPs may have been living with other children for whom they were receiving TANF. The majority of NCPs receiving TANF were male (21 of 25 receiving TANF four quarters before referral to SHARE, and 27 of 40 receiving TANF in the quarter immediately before referral).

Rates of participation in the Food Stamp Program (FSP) are higher than in TANF. Between one-fifth and one-quarter of the sample was receiving food stamps during each quarter before referral. The higher rates of participation in the FSP likely reflect the less stringent eligibility criteria of the FSP, both in terms of family structure and financial resources, as well as need among this relatively disadvantaged population.

Before referral to SHARE,the majority of NCPs were not employed, and average earnings were low. During the first three of the four quarters before referral to SHARE, only about one-third of all NCPs had any reported employment (Table III.2). During the quarter immediately before referral, the share with any employment was lower still, with only about one-quarter reporting employment. Moreover, it appears that nearly all those who were employed before referral worked in jobs that offered low wages or worked too few hours to earn a substantial living. Even four quarters before referral, when average earnings were highest, three-quarters of those working earned less than $2,500 in the quarter (Table A.4). Average earnings among all NCPs were lowest — a mere $320 — during the quarter immediately preceding referral to SHARE (Table III.2). The low average earnings reflected primarily the low rates of employment among referred NCPs, which declined to only 25 percent in the quarter before referral to SHARE. Average quarterly earnings for those employed also declined, to $1,302. It is unclear, however, if the decline in average earnings reflects an actual decline among those who remained employed or if those who remained employed were lower earners throughout the period.

Few NCPs paid child support before referral to SHARE.  During each of the four quarters leading up to their referral to SHARE, no more than 18 percent of all NCPs paid any child support (Table III.3). The proportion of NCPs paying child support was lowest — 13 percent — during the quarter immediately preceding referral to SHARE. Several circumstances help explain why some NCPs were referred to SHARE despite these reported payments. First, parents may have paid support during the balance of the calendar quarter in which they were referred. Second, there may have been a time lag between identification of a delinquent parent and referral to SHARE, during which that parent may have made a payment. Third, some payments may reflect intercepted Internal Revenue Service (IRS) refunds that would not qualify the NCPs as meeting their obligations.⁽¹⁵⁾

Average child support collections were extremely low before referral to SHARE and only about half of the NCPs with employment paid any child support. During the fourth quarter before referral, DCS collected an average of only $75 from the NCPs referred to SHARE. This low average payment reflects the 84 percent of NCPs who made no payments (Table III.3). The average amount collected declined progressively throughout the year leading up to referral, reaching a low of $38 during the quarter immediately before referral. The reduction in average payments was greater than the reduction in the percent paying, perhaps indicating that those who continued to pay had smaller obligation amounts or paid less than was due.⁽¹⁶⁾ Our data also suggest that the NCPs may have informally adjusted the amount of support they paid according to the relative burden that these payments represented. NCPs who paid any child support four quarters before referral paid an average of $478 (Table III.3). This amount represents about 27 percent of the average quarterly earnings for employed NCPs (Table III.2). The amount declined to a low of $285 during the quarter immediately preceding referral — about 22 percent of the average quarterly earnings of NCPs who were working.

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B. How Did Targeted NCPs Fare after Referral to SHARE?

The ultimate goal of SHARE was to help NCPs meet their obligations to financially support their children. However, an intermediate goal of SHARE was to help NCPs increase their employment and earnings, as parents need income in order to meet their obligations, and the most likely source of steady income is a job. This section examines trends over time in the employment, earnings, and child support payments of NCPs referred to SHARE.

Employment rates and earnings increased after referral to SHARE. Employment rates among all NCPs referred toSHARE increased from their low of one-quarter during the quarter immediately preceding referral to one-third during the quarter of referral (Figure III.2).⁽¹⁷⁾ In subsequent quarters, employment rates remained just above one-third. Similarly, average earnings increased 40 percent between the quarter immediately preceding referral and the quarter of referral (Table A.5).⁽¹⁸⁾ However, average earnings continued to climb more substantially than the employment rate did (Figure III.3). In the fourth quarter after referral, average earnings were almost three times the average during the quarter immediately prior to referral, and almost one-and-a-half times the pre-referral high. The larger increases in average earnings across all NCPs referred to SHARE (relative to increases in employment) reflect higher average earnings for those NCPs who were employed (Table A.5). These gains could reflect increases in hourly wages, hours worked each week, or weeks worked in each quarter.

After referral to SHARE, NCPs generally experienced more sustained spells of employment. About 16 percent of referred NCPs were employed during all four quarters after referral, compared with only 9 percent employed during all four quarters preceding referral (Table A.9). This clearly contributed to the increase in average earnings after referral to SHARE. Sustained employment is particularly important for low-income NCPs, as it likely increases their opportunities for wage progression and, thus, their ability to meet their financial obligations to their children. Sustained employment also increases the probability that a wage withholding order can be put into effect.

Child support payment rates increased markedly between the quarter of referral to SHARE and the quarter after referral. Among all NCPs referred to SHARE, child support payment rates nearly doubled between the quarter of referral to SHARE and the subsequent quarter (Figure III.4). Payment rates during all subsequent quarters ranged between 30 and 40 percent, substantially higher than they were before referral to SHARE. Even so, in each quarter after referral, the majority of referred NCPs failed to pay any child support.

Overall, average child support collections were substantially higher after referral to SHARE than before. During every quarter after referral to SHARE except the first one, average child support collections among all NCPs were more than $125 (Figure III.5). In contrast, average quarterly collections before referral to SHARE never rose above $75. Average collections increased in almost every quarter after referral; by the ninth post-referral quarter, they were at a high of $196. This trend reflects mainly increases in the number of NCPs paying support, which are noticeably larger than the increases in average payments across those NCPs paying support (Table A.7). Nine quarters after referral, 38 percent of all referred NCPs were paying child support — an increase of 143 percent relative to the prereferral high of 17.8 percent (in the third quarter before referral). In contrast, average payments across those NCPs paying support increased by only 28 percent over the same period. The increases in child support collections also reflect more sustained payments by NCPs who were paying support. Of the referred NCPs, 14 percent made child support payments in all four quarters after referral to SHARE, compared with only 3 percent paying in all four quarters prior to referral (Table A.9).

Outcomes in employment and earnings varied across groups that took different paths through the initiative. In all quarters after referral to SHARE, employment rates were lowest among NCPs who never appeared at contempt hearings, and highest among those who appeared but were not referred for WtW services (Figure III.6). Average earnings followed a similar pattern (Figure III.7). All of the differences in post-referral employment and average earnings between those who appeared at their hearings and those who did not appear are statistically significant (Table A.5). In general, the differences in employment between the NCPs referred for WtW services and those not referred for services are not significant, while the differences in their average earnings are significant (Table A.6).

Source: Administrative data from state of Washington (as of March 2003).
NCP = noncustodial parent; Q0 = quarter of referral to SHARE; WtW = Welfare-to-Work.

Source: Administrative data from state of Washington (as of March 2003).
NCP = noncustodial parent; Q0 = quarter of referral to SHARE; WtW = Welfare-to-Work.

Child support payment rates and average collections were lowest among those who never appeared at their contempt hearings. In almost every quarter after referral to SHARE, the payment rates and average collections among NCPs who never appeared at their contempt hearings were half or less than half of those among NCPs who did appear (Figure III.8), and the differences are significant (Table A.7). Payment rates among those who were referred for WtW services were higher than payment rates among those who appeared at their hearings but were not referred for services; however, these differences are not statistically significant (Table A.8). Although NCPs referred for WtW services paid slightly more often, average collections for this group were lower than for NCPs who appeared but were not referred for WtW services (Figure III.9). This may reflect the fact that, on average, NCPs who appeared for their hearings and were referred for WtW services earned significantly less in the quarters after referral than the NCPs who appeared but were not referred for WtW services. Hence, on average, they may have only been able to afford smaller amounts.

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C. What Can We Conclude from These Findings?

Trends in employment, earnings, and child support payments change around the time of referral to SHARE. The pre-post referral patterns for all NCPs in this study suggest that something is happening during the quarter of referral toSHARE or during the quarter after referral to reverse the pre-referral trends in declining employment, earnings, and child support payments. Because the quarter of referral is a different calendar quarter for each sample member, occurring within a span of more than three years, it is unlikely that a specific point-in-time event or phenomenon, such as the institution of new child support enforcement policies or an improvement in the economy, contributed to the immediate and substantial increases in outcomes after referral.

Source: Administrative data from state of Washington (as of March 2003).
NCP = noncustodial parent; Q0 = quarter of referral to SHARE; WtW = Welfare-to-Work.

Source: Administrative data from state of Washington (as of March 2003).
Q0 = quarter of referral to SHARE; WtW = Welfare-to-Work.

A variety of factors, including normal fluctuations, likely contributed to the increases in employment, earnings, and child support payments after referral to SHARE. The post-referral increases in employment, earnings, and child support are observed, although much more modestly, even for NCPs who never appeared at a contempt hearing. It is unlikely that SHARE had much influence on these NCPs, as they had little exposure to the initiative.⁽¹⁹⁾ Rather, factors other than the SHARE program probably contributed to the pre-post patterns observed for this group. These same external factors may have affected the pre-post patterns of other groups of NCPs as well. For instance, it is possible that the observed patterns reflect normal fluctuations in the labor market experiences and child support payment patterns of NCPs. In the quarter before their referral, the NCPs referred toSHARE appear as individuals to be going through a particularly bad period with regard to employment and their ability to pay child support. The observed increases during the quarter of referral and after that quarter are likely to reflect some degree of natural recovery from this low.

Differences in pre-referral unobserved characteristics may have influenced the paths NCPs took and the outcomes they achieved. The distribution of NCPs into various groups after referral to SHARE probably was not random. Rather, NCPs in certain circumstances or of particular dispositions may have had a higher propensity to appear at their hearings than did other NCPs, and some NCPs likely had a relatively greater need for WtW services. Traces of these differences among NCPs in the study are observed before referral to SHARE, although in most cases the differences are not large enough to be statistically significant. For instance, it seems that NCPs who did not appear at hearings may have been the most disadvantaged NCPs in the sample. Before referral toSHARE, their employment rates, average earnings, child support payment rates, and average collections were lower than those of any other group. Perhaps parents who failed to heed the summons to appear in court (or who did not receive the summons because they could not be located) were least likely to have characteristics associated with socioeconomic success and, in turn, were least likely to have positive outcomes when referral to SHARE did not result in any intervention.

Nonetheless,the carrots and sticks built into the SHARE initiative appear to have influenced some NCPs. Preexisting differences in the employment, earnings, and support outcomes of NCPs who appeared at their hearings and of NCPs who did not appear at their hearings clearly become magnified after referral to SHARE. This widening of the gap in outcomes suggests that SHARE may have played a role in the improvements for NCPs engaged in the initiative. The consequences for failing to meet their obligations, which were presented at the contempt hearings, may have motivated some of the NCPs who appeared at the hearings to improve their economic situations and meet their obligations more than they would have otherwise. This would especially be true if the NCPs had good employment prospects and much to lose by becoming incarcerated and establishing a criminal record. Similarly, the alternatives offered at the contempt hearings — such as renegotiation of support orders or even forgiveness of arrears — may have reduced the incentives for some NCPs to work few hours or hide their earnings. They may have also motivated some NCPs who were working in the underground economy before referral to SHARE to move into formal jobs after referral.⁽²⁰⁾

It is also possible that WtW services contributed to higher post-referral rates of child support payment and to lower earnings among NCPs referred for services. YCPA staff regularly monitored and reviewed payments made by WtW participants, and this close scrutiny could have prompted additional payments. Lower earnings among the NCPs referred for WtW services could reflect the time that these SHARE participants spent in WtW activities, which would have reduced their availability to work. It is also possible that the NCPs referred for WtW services were systematically more disadvantaged than those who appeared for hearings but were not referred for WtW services. Their lower average earnings may reflect important differences in their educational and employment background and, hence, in their income earning potential. In the end, however, it is not possible in this study to explore such potential systematic differences among NCPs targeted for participation in SHARE, nor to determine how any of these NCPs would have behaved or fared without SHARE.

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D. Summary and Study Conclusions

Employment rates, earnings, and child support collections were higher after referral to SHARE than before, and there were clear differences in outcomes among NCPs who took different paths after referral. Several factors probably contributed to these results. It appears that the NCPs in this study had reached a low point in their ability to work and/or pay child support during the quarter before referral, and that the increases observed in subsequent quarters reflect some natural recovery from this low point. It also seems likely that different types of NCPs responded differently to the initiative based on unobserved characteristics that were present before referral. In addition to these factors, however, it appears that some or all of the components of SHARE — service of a summons, threat of incarceration, offer to renegotiate obligations and arrears, availability of WtW services, and ongoing monitoring of compliance — may have played a role in the improvements in outcomes observed for NCPs who became actively engaged in the initiative. In general, these NCPs worked more, earned more, and paid more support six to nine quarters after referral to SHARE than at any point during the year preceding referral. Moreover, differences between the employment, earnings, and child support outcomes for NCPs who appeared at hearings and learned about SHARE and the outcomes for NCPs who never appeared — insignificant prior to referral to SHARE — become more marked and significant during the quarters after referral to the program.

Without a random assignment evaluation, we cannot establish definitively that SHARE is responsible for the observed increases, the extent to which it influenced these outcomes, or how it influenced them. However, the available evidence suggests that the intervention is promising. A more rigorous evaluation of SHARE or of similar initiatives could shed light on the effects of the program relative to other factors. An ideal future evaluation would use a controlled experiment that would determine outcomes for participants and also provide information on how targeted NCPs would have fared in the absence of the intervention — that is, the program's "value-added." In such an evaluation, it would be important to examine how various components of the intervention contribute to observed changes in the outcomes of interest, and their relative importance in achieving the desired results overall and for various types of NCPs (for example, NCPs who had criminal records before referral, or those with poor employment histories).

Before embarking on such an evaluation, it might be useful to understand better why so many NCPs fail to appear at their court hearings and, once located, what strategies could more effectively help this relatively disadvantaged group of individuals. Implementing those strategies before conducting a more rigorous evaluation could help programs reach out more effectively to all individuals who may benefit from their services — not just those who are easier to reach — and thereby result in a more thorough test of the intervention.

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Endnotes

13.  This pattern of recovery from a pre-program low is typically referred to as "Ashenfelter's dip," for his observation that adult participants in job training programs often experience a dip in earnings prior to their decision to participate (Ashenfelter and Card 1985).

14.  The tables in Appendix A contain data supporting all the findings and statistics discussed in this chapter. Many, but not all, of the findings and statistics also are presented in the tables and figures in this chapter. Some of the tables in Appendix A present more statistics than are discussed in the chapter.

15.  There is no way to distinguish interceptions of IRS refunds from voluntary payments or wage garnishment in the child support payment data in this study.

16.  Unfortunately, no data on child support obligations were available for this study.

17.  Sample sizes increased substantially during the quarter of referral to SHARE and during the quarter after referral because data were available for more NCPs during those quarters. Pre-post referral results are not biased by this change in sample size; an analysis of all outcomes limiting the post-referral sample to NCPs for whom pre-referral data are available reveals patterns consistent with those reported here.

18.  This jump in average earnings during the quarter of referral relative to the quarter just before referral is likely to be, in part, an artifact of our quarterly data analysis. That is, for NCPs whose date of referral to SHARE falls relatively early in the quarter, the quarter of referral is likely to include some post-referral earnings.

19.  The only exposure these NCPs may have had to the initiative was receipt of the summons to appear in court, and 46 percent, at most, of the NCPs who did not appear at a hearing seem likely to have experienced that event. As discussed in Chapter II, the majority of NCPs who did not appear at a hearing could not be located (128 closed cases) or were incarcerated (24 closed cases). Service of the summons alone is likely to have had only a small influence on the NCPs who did receive the summons but failed to appear at a hearing.

20.  Research suggests that the accumulation of arrears to unrealistic levels and the state's retention of child support to offset the custodial parents' welfare payments may motivate NCPs to evade the child support system by moving out of formal jobs and into the underground economy (see Miller and Knox 2001).

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