Research Findings on Cost Avoidance and State Financing Variables Effect on Performance
JUL 31, 2000
TO: ALL IV-D DIRECTORS
RE: Dissemination of Research Findings on Cost Avoidance and State Financing Variables Effect on Performance
This memorandum disseminates the executive summaries of two recently completed studies funded by OCSE. A brief summary of each report's main findings appears below:
The Potential of the Child Support Enforcement Program to Avoid Costs to Public Programs: A Review and Synthesis of Literature (The Lewin Group with Johns Hopkins University)
- Previous estimates of cost avoidance are outdated, difficult to compare and cannot be generalized. Some previous studies may only apply to one State and all suffered from data limitations and methodological problems.
- The potential for cost avoidance is unknown. The potential for improved collections may be mitigated by the inability of many of the poorest noncustodial parents to pay support.
- Studies of child support review and adjustment efforts that avoided government costs in public assistance cases may be outdated by new changes in the caseload caused by TANF programs.
- A small number of studies indicates that child support has, at most, a limited indirect effect on marital and childbearing behavior of parents.
- The Urban Institute's Transfer Income Model (TRIM) is the only major microsimulation model with the capacity to measure child support cost avoidance.
- While State IV-D program administrative data, merged with data from other agencies, are potentially a rich source of data to estimate cost avoidance, recent State studies have limitations.
Preliminary Assessment of the Associations between State Child Support Enforcement Performance and Financing Structure (The Lewin Group with ECONorthwest)
- A greater reliance on general fund appropriations may be associated with somewhat better performance.
- Several factors related to the structure of the IV-D program appear to be related to CSE performance.
- Several demographic factors outside the domain of the IV-D program also appear to be related to CSE performance.
- States may face tradeoffs in attempting to maximize their overall performance in the incentive measures especially with regard to the cost-effectiveness measure.
- Other than tradeoffs associated with cost-effectiveness, it does not appear that improvement on one incentive measure automatically translate into an improvement or worsening of another measure. Exceptions include a positive and strong correlation between the paternity establishment percentage and percent of cases with orders measures and a positive but weaker correlation between the percent of cases with orders and the collection rate for current support.
David Gray Ross
Office of Child Support Enforcement