Unemployment Insurance Generosity and Child Protective Services Involvement

• In Event: Economic Insecurity and CPS Involvement: Bidirectional Risks and Policy Levers

Abstract

Background: The Federal Unemployment Insurance (UI) program provides income support to unemployed workers but varies substantially across states in benefit levels and eligibility, raising concerns about economic equity. Unemployment and financial strain are linked to adverse family outcomes, including increased risk of child maltreatment and CPS involvement. While economic hardship is a well-documented risk factor for CPS involvement, research on the role of UI generosity—particularly benefit amounts—in mitigating these risks is limited and offers mixed findings.

Objectives: This study investigates the role of UI generosity, measured by the earnings replacement ratio, in potentially mitigating the adverse relation of unemployment with child maltreatment, focusing on child protective services (CPS) involvement.

Participants and setting: This study analyzes data from the National Child Abuse and Neglect Data System (NCANDS) Child Files from Q1 2009 to Q1 2021, covering CPS-investigated maltreatment reports nationwide.

Methods: Using a two-way fixed-effects approach, we examine associations of variation in UI benefit generosity across states and over time, measured through earnings replacement ratios, with CPS investigation rates.

Results: Findings highlight the protective role of financial stability provided by UI, particularly in reducing child welfare system involvement for neglect cases. A 1-point increase in the UI benefit replacement ratio was associated with 9.2 to 15.6 fewer CPS investigations per 1,000 children, and this effect was statistically significant at the 5% level. However, this protective effect diminished as unemployment rates increased: each 1-point rise in the unemployment rate weakened the association by 0.84 to 1.86 investigations per 1,000 children (also statistically significant). No statistically significant associations were found for substantiations. These findings suggest that UI generosity can reduce CPS investigations under typical economic conditions, but its effectiveness may be constrained during extreme economic shocks, such as the COVID-19 pandemic.

Conclusions: The study contributes to the literature by exploring the interaction between unemployment, UI generosity, and CPS involvement, offering insights for policymakers on designing robust economic support systems to protect children.

Authors

• Anna Ko, University of Wisconsin-Madison
  Presenting Author

• Lawrence M. Berger, University of Wisconsin-Madison
  Non-Presenting Co-Author

• Derek S Brown, Washington University in St. Louis
  Non-Presenting Co-Author

• Jessica Erin Pac, University of Wisconsin-Madison
  Non-Presenting Co-Author

• Runshi Tang, University of Wisconsin-Madison
  Non-Presenting Co-Author