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Research Findings on Cost Avoidance and State Financing Variables Effect on Performance

DCL-00-82

Published: July 31, 2000
Information About:
State/Local Child Support Agencies
Topics:
Funding
Types:
Policy, Dear Colleague Letters (DCL), Research & Data, HHS/ACF/OCSE Research

DCL-00-82

JUL 31, 2000

TO: ALL IV-D DIRECTORS

RE: Dissemination of Research Findings on Cost Avoidance and State Financing Variables Effect on Performance

Dear Colleague:

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:

  1. Previous estimates of cost avoidance are outdated, difficult to compare and cannot be generalized.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.
  2. 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.
  3. Studies of child support review and adjustment efforts that avoided government costs in public assistance cases may be outdated by new changes in the caseload caused by TANF programs.
  4. A small number of studies indicates that child support has, at most, a limited indirect effect on marital and childbearing behavior of parents.
  5. The Urban Institute's Transfer Income Model (TRIM) is the only major microsimulation model with the capacity to measure child support cost avoidance.
  6. 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.
  1. A greater reliance on general fund appropriations may be associated with somewhat better performance.
  2. Several factors related to the structure of the IV-D program appear to be related to CSE performance.
  3. Several demographic factors outside the domain of the IV-D program also appear to be related to CSE performance.
  4. States may face tradeoffs in attempting to maximize their overall performance in the incentive measures especially with regard to the cost-effectiveness measure.
  5. 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.

Sincerely,

David Gray Ross
Commissioner
Office of Child Support Enforcement