The Impact of Child Support on the Household Income and Labour Supply of Payee Lone Mothers

One objective of child support schemes is to reduce the reliance of lone parents on government transfers. I estimate the effect of receiving child support on the household income and labour market activity of payee lone mothers in Australia. I use variation in the amount of child support received driven by the employment status of the paying parent, and find that receiving any child support reduces government transfers, increases labour force participation, and increases household income in excess of the amount of child support received. Increasing the amount of child support received does not decrease the employment rate or hours worked of lone mothers.