Do Non-Resident Parents with Lower Labor Market Attachment React to Institutional Changes in Child Support Obligations? Evidence from IAB-PASS

This paper investigates how parents who live apart from their children have responded to changes in the amount of the self-support reserves. Being financially able to pay maintenance is a precondition for the obligation to maintain children in Germany. Parents with incomes below the self-support reserve do not pay child support. In addition, the self-support reserve di ers for employed and unemployed parents. The difference between the two is considered to be a bonus for employment by competent courts, which they adjust over time. We exploited PASS panel data and individual fixed-effects models to observe parents' responses to these changes. We did not confirm the Higher Regional Courts' assertion that the increasing difference between the self-support reserves of employed and non-working parents is an incentive to work. Further, we found no evidence of any influence on attitudes towards the labor market or debt behavior.