Advanced Search
MyIDEAS: Login to save this paper or follow this series

Welfare effects of fixed and percentage-expressed child support awards

Contents:

Author Info

  • D. Del Boca
  • C. J. Flinn

Abstract

Over the last decade a large number of states have significantly altered their legal statutes concerning the disposition of divorce cases involving children. In particular, many states have increasingly employed percentage-expressed orders in which child support obligations in a given period are determined as a proportion of the contemporaneous income of the noncustodial parent. In contrast to more traditional systems in which obligations were set in fixed nominal terms at the time of the divorce settlement and were infrequently (or never) updated, the dynamic system has the advantages of allowing children (and the custodial parent) an opportunity to share in the general income gains experienced by the noncustodial parent over the life cycle and of possibly alleviating some noncompliance problems. In this paper we conduct a rather extensive theory-based empirical investigation of the effects of these systems on the income process for divorced fathers and the child support transfer decision. We estimate a flexible statistical model for the income- generation process for divorced fathers which encompasses the period both before and after the divorce. We interpret the estimates from this model to indicate small behavioral effects of the type of order on postdivorce income, but nonrandom assignment (in terms of the means and variances of predivorce income) into the percentage-expressed-order state. Our analysis of the effects of the order type on child support transfers is divided into two parts. In the first, a "reduced form" analysis, we investigate whether or not the divorced father's regime defined as the order type and withholding status can be considered exogenous vis-a-vis the transfer decision, and examine the relative effects of the various regimes on the transfer rate. We further attempt to investigate order-type effects on compliance in the context of a structural model of the compliance decision. The results of the two analyses are for the most part consistent. Percentage orders are generally associated with lower compliance rates, though withholding tends to alleviate the problem. The highest compliance rates are associated with fixed orders coupled with withholding.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.irp.wisc.edu/publications/dps/pdfs/dp104194.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Wisconsin Institute for Research on Poverty in its series Institute for Research on Poverty Discussion Papers with number 1041-94.

as in new window
Length:
Date of creation:
Date of revision:
Handle: RePEc:wop:wispod:1041-94

Contact details of provider:
Postal: 3412 Social Science Building, 1180 Observatory Drive, Madison, WI 53706
Phone: (608) 262-6358
Fax: (608) 265-3119
Email:
Web page: http://www.ssc.wisc.edu/irp/dp/dplist.htm
More information through EDIRC

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
  2. Lazear, Edward P. & Michael, Robert T., 1988. "Allocation of Income within the Household," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226469669, April.
  3. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  4. Irwin Garfinkel & Marieka M. Klawitter, 1990. "The effect of routine income withholding of child support collections," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 9(2), pages 155-177.
  5. Weiss, Y. & Willis, R.J., 1989. "An Economic Analysis Of Divorce Settlements," University of Chicago - Economics Research Center 89-5, Chicago - Economics Research Center.
  6. Daniela Del Boca & Christopher J. Flinn, 1994. "Expenditure Decisions of Divorced Mothers and Income Composition," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 742-761.
  7. John W. Graham & Andrea H. Beller, 1989. "The Effect of Child Support Payments on the Labor Supply of Female Family Heads: An Econometric Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 664-688.
  8. David Betson & Eirik Evenhouse & Siobhan Reilly & Eugene Smolensky, 1992. "Trade-offs implicit in child-support guidelines," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(1), pages 1-20.
  9. Irwin Garfinkel & Donald Oellerich, 1989. "Noncustodial Fathers’ Ability to Pay Child Support," Demography, Springer, vol. 26(2), pages 219-233, May.
  10. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
  11. Yoram Weiss & Robert J. Willis, . "Transfers Among Divorced Couples: Evidence and Interpretation," University of Chicago - Population Research Center 90-4a, Chicago - Population Research Center.
  12. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-54, July.
  13. Wu, De-Min, 1973. "Alternative Tests of Independence Between Stochastic Regressors and Disturbances," Econometrica, Econometric Society, vol. 41(4), pages 733-50, July.
  14. 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.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wop:wispod:1041-94. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.