The Effect of Incarceration on Child Support Arrears and Consumer Debt

• In Event: From Credit Access to Debt Enforcement: Financial Vulnerability Across Systems

Abstract

A large share of incarcerated men in the United States are non-custodial fathers, and incarceration sharply reduces earnings capacity both during confinement and after release (Western, 2006). Child support enforcement constitutes one of the most extensive financial obligation systems affecting low-income non-custodial parents, with the total amount of unpaid child support (arrears) due nationally being over $116 billion in 2024 (OCSE, 2025). Orders are typically set based on prior earnings and often remain in place during periods of incarceration, leading to the accumulation of substantial arrears. Unlike most consumer debts, child support obligations generally cannot be discharged in bankruptcy and may accrue interest and penalties, making them structurally distinct from credit-market debt. Incarceration is associated with lower formal increased arrears, particularly when orders are not modified to reflect inability to pay (McLeod, 2018). These dynamics may impair labor market reintegration and financial stability at re-entry.

Incarcerated and formerly incarcerated individuals also face limited access to mainstream credit and experience greater incidences of high-cost or delinquent consumer debts (CFPB, 2022). Further, child support arrears accumulate administratively and may interact with consumer borrowing in complex ways: arrears may increase liquidity needs and push individuals toward high-cost credit; alternatively, enforcement actions may restrict access to formal credit markets. Yet little research has causally examined how incarceration jointly affect child support arrears and other consumer debt holdings.

By studying the causal effect of incarceration on child support obligations and consumer debt among non-custodial parents, this paper contributes to research on the economic consequences of incarceration (Harris, Evans & Beckett, 2010), the functioning of the child support system (Meyer et al., 2020), and the financial lives of low-income households navigating formal debt.

Our analyses employ data from the Wisconsin Administrative Data Core (WADC) spanning 2015–2024 and including court records; incarceration records; employment, earnings, and benefit records; and mainstream and subprime credit history data from the Ohio State University-University of Wisconsin Consumer Credit Panel (OSU-WI CCP). The WADC includes information on criminal charges and outcomes, including jail and prison sentences and spells for all individuals who have been charged. The OSU–WI CCP comprises mainstream proprietary data, including records of all credit accounts (e.g., types, outstanding balances, payment status, credit scores) of individuals in Wisconsin who have a mainstream credit report (approximately 89% of the adult population). These are further linked with subprime credit history data.

We estimate the ex-post causal effect of incarceration on child support and consumer debt by comparing child support and consumer debt accrual for individuals randomly assigned to judges who vary in their sentencing. Our identification strategy follows standard methodology employed in the impact of incarceration literature (e.g., Aneja & Avenancio-Leon, 2020). That is, we leverage quasi-random assignment to judges with differential propensities to sentence individuals to incarceration to identify the causal local average treatment effect of incarceration on child support and consumer debt. The finds have implications for child support policy and debt regulations during periods of incarceration, as well as for informing post-incarceration interventions to support financial security.

Author

• Trisha Chanda, The Ohio State University
  Presenting Author