By: Shannon Seitz (Boston College)
Geoffrey Sanzenbacher (Analysis Group)
Andrew Beauchamp (Boston College)
Meghan Skira (University of Georgia)
Why do some men father children outside of marriage but not provide support? Why are single women willing to have children outside of marriage when they receive little or no support from unmarried fathers? To answer these questions, we develop and estimate a dynamic equilibrium model of marriage, employment, fertility, and child support. We consider the extent to which two explanations account for the prevalence of ‘deadbeat dads’ and non-marital childbearing: low wages and a shortage of single men relative to single women. Even if women prefer to have children within marriage, when faced with a shortage of high wage spouses it may be optimal to have children with low wage men outside of marriage. In response, some men have incentives to have children and not support them. The model is estimated by efficient method of moments using data from the National Longitudinal Survey of Youth 1979. We conduct several counterfactual experiments including equating black and white population supplies and eliminating the racial gap in wages to explore the implications of the model. We also analyze a counterfactual policy in which child support enforcement is perfect.