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Child support guidelines and divorce incentives

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  • Allen, Douglas W.
  • Brinig, Margaret
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    Abstract

    A child support guideline is a formula used to calculate support payments based on a few family characteristics. Guidelines began replacing court awarded support payments in the late 1970s and early 1980s, and were eventually mandated by the federal government in 1988. Two fundamentally different types of guidelines are used: percentage of obligor income, and income shares models. This paper explores the incentives to divorce under the two schemes, and uses the NLSY data set to test the key predictions. We find that percentage of obligor income models are destabilizing for some families with high incomes. This may explain why several states have converted from obligor to income share models, and it provides a subtle lesson for the no-fault divorce debate.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0144818812000300
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    Bibliographic Info

    Article provided by Elsevier in its journal International Review of Law and Economics.

    Volume (Year): 32 (2012)
    Issue (Month): 3 ()
    Pages: 309-316

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    Handle: RePEc:eee:irlaec:v:32:y:2012:i:3:p:309-316

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    Web page: http://www.elsevier.com/locate/irle

    Related research

    Keywords: Child support; Divorce; Income shares; Percent obligor;

    References

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    1. Justin Wolfers, 2006. "Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results," American Economic Review, American Economic Association, vol. 96(5), pages 1802-1820, December.
    2. Weiss, Yoram & Willis, Robert J, 1985. "Children as Collective Goods and Divorce Settlements," Journal of Labor Economics, University of Chicago Press, vol. 3(3), pages 268-92, July.
    3. Niko Matouschek & Imran Rasul, 2008. "The Economics of the Marriage Contract: Theories and Evidence," Journal of Law and Economics, University of Chicago Press, vol. 51(1), pages 59-110, 02.
    4. Allen, Douglas W., 1990. "An inquiry into the state's role in marriage," Journal of Economic Behavior & Organization, Elsevier, vol. 13(2), pages 171-191, March.
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