Income effects of divorce in families with dependent children
AbstractMarital splits may affect the economic well-being of families with children significantly. We study the economic effects of divorce in such families in Norway, using administrative information on more than 60,000 individuals. In the typical case, where the mother has custody, the mother (and child) lacks behind before maintenance payments, but after adding these, the outcomes at the median are very similar. However, the median pre-post divorce income reduction is larger for custodial women than for non-custodial men, they have larger risks of an income drop, and larger probabilities of an aggravated position in the income distribution. We also supplement the measures of realized net incomes with an estimate of earnings capabilities. Though not affecting the ranking of the different groups, these calculations indicate that measures based on realized incomes may underrate the well-being of individuals who do not work full-time. The analysis also includes a sensitivity analysis of important parameters in the equivalence scales. An important feature of the Norwegian âpost-divorce packageâ is that the Government guarantees a minimum level for, and enforces, maintenance payments from the non-custodian to the custodian parent. The system emerges from our analysis as having an equalizing effect on the economic costs of divorce.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Population Economics.
Volume (Year): 21 (2008)
Issue (Month): 2 (April)
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Other versions of this item:
- Bratberg, Espen & Tjøtta, Sigve, 2002. "Income Effects of Divorce in Families with Dependent Children," Working Papers in Economics 20/02, University of Bergen, Department of Economics.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
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