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 ”post-divorce package” 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 InfoPaper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 20/02.
Length: 27 pages
Date of creation: 15 Nov 2002
Date of revision:
Contact details of provider:
Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Web page: http://www.uib.no/econ/en
More information through EDIRC
Marital dissolution; income distribution; income changes; child custody; equivalence scales.;
Other versions of this item:
- Espen Bratberg & Sigve Tjøtta, 2008. "Income effects of divorce in families with dependent children," Journal of Population Economics, Springer, vol. 21(2), pages 439-461, April.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- I38 - Health, Education, and Welfare - - Welfare 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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