IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

An Economic Model of Child Custody

  • M. Francesconi

    ()

  • A. Muthoo

    ()

This paper develops a model of child custody based on an incomplete-contract approach to the allocation of property rights. Because of the presence of transaction costs in marriage, altruistic parents cannot contract upon the investments they make into their children, but can reduce the resulting inefficiencies by determining ex ante the parent who would be allocated custody in case they divorce. We show that: (i) the optimal allocation of custodial rights depends on both preferences and technological factors; (ii) custodial rights can be allocated either to the parent who values the benefits from child welfare more or, vice-versa, to the parent with the lowest valuation; (iii) if one parent�s investment is significantly more important than the other parent�s investment, then sole custody is preferred to joint custody and it should be allocated to the parent whose investment is relatively more important; and (iv) if the importance of the parents� investments is sufficiently similar and if the differences in parents� valuations of child quality are large, then joint custody is optimal with the low-valuation parent receiving a relatively greater share, because the other parent would invest in the child anyway while the low-valuation parent would be endowed with greater bargaining power. The implications of these results are then interpreted in the context of current custody laws, discussed in relation to empirical estimates of some of the parameters underlying the optimal custody rule, and used to question the skepticism surrounding prenuptial contracts.

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.essex.ac.uk/economics/discussion-papers/papers-text/dp560.pdf
Download Restriction: no

Paper provided by University of Essex, Department of Economics in its series Economics Discussion Papers with number 560.

as
in new window

Length:
Date of creation: 05 Aug 2003
Date of revision:
Handle: RePEc:esx:essedp:560
Contact details of provider: Postal: Wivenhoe Park, COLCHESTER. CO4 3SQ
Phone: +44-1206-872728
Fax: +44-1206-872724
Web page: http://www.essex.ac.uk/economics/

More information through EDIRC

Order Information: Postal: Discussion Papers Administrator, Department of Economics, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, U.K.
Email:


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. Oliver Hart & John Moore, 1988. "Property Rights and the Nature of the Firm," Working papers 495, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. repec:bla:restud:v:74:y:2007:i:3:p:857-895 is not listed on IDEAS
  3. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
  4. Kaushik Basu, 2004. "Gender and Say A Model of Household Behavior with Endogenously-determined Balance of Power," Harvard Institute of Economic Research Working Papers 2054, Harvard - Institute of Economic Research.
  5. Flinn, C.J., 1998. "Modes of Interaction Between Divorced Parents," Working Papers 98-04, C.V. Starr Center for Applied Economics, New York University.
  6. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
  7. Yoram Weiss & Robert J. Willis, . "Transfers Among Divorced Couples: Evidence and Interpretation," University of Chicago - Population Research Center 90-4a, Chicago - Population Research Center.
  8. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  9. Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
  10. Shelly Lundberg & Robert A. Pollak, 2001. "Efficiency in Marriage," NBER Working Papers 8642, National Bureau of Economic Research, Inc.
  11. Irwin Garfinkel & Sara Mclanahan & Daniel Meyer & Judith Seltzer, 1998. "Fathers under Fire: The Revolution in Child Support Enforcement in the USA (This CASEpaper is a summary of the book by the same title and authors, published by the Russel Sage Foundation, 1998)," CASE Papers case14, Centre for Analysis of Social Exclusion, LSE.
  12. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  13. Stephen L. Parente & Richard Rogerson & Randall Wright, 2000. "Homework in Development Economics: Household Production and the Wealth of Nations," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 680-687, August.
  14. Gershuny, Jonathan, 2000. "Changing Times: Work and Leisure in Postindustrial Society," OUP Catalogue, Oxford University Press, number 9780198287872, March.
  15. Imran Rasul, 2006. "The Economics of Child Custody," Economica, London School of Economics and Political Science, vol. 73(289), pages 1-25, 02.
  16. Gary S. Becker & Nigel Tomes, . "Human Capital and the Rise and Fall of Families," University of Chicago - Population Research Center 84-10, Chicago - Population Research Center.
  17. Bergstrom, Theodore C., 1993. "A survey of theories of the family," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 2, pages 21-79 Elsevier.
  18. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  19. Maurizio Mazzocco, 2007. "Household Intertemporal Behaviour: A Collective Characterization and a Test of Commitment," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 857-895.
  20. Pollak, Robert A, 1985. "A Transaction Cost Approach to Families and Households," Journal of Economic Literature, American Economic Association, vol. 23(2), pages 581-608, June.
  21. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Working Papers 91-08, University of Washington, Department of Economics.
  22. Larry Bumpass & R. Raley & James Sweet, 1995. "The changing character of stepfamilies: implications of cohabitation and nonmarital childbearing," Demography, Springer, vol. 32(3), pages 425-436, August.
  23. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, May.
  24. Rasul, Imran, 2008. "Household bargaining over fertility: Theory and evidence from Malaysia," Journal of Development Economics, Elsevier, vol. 86(2), pages 215-241, June.
  25. Del Boca, Daniela & Flinn, Christopher J, 1995. "Rationalizing Child-Support Decisions," American Economic Review, American Economic Association, vol. 85(5), pages 1241-62, December.
  26. 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.
  27. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
  28. Gary S. Becker, 1974. "A Theory of Marriage," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 299-351 National Bureau of Economic Research, Inc.
  29. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-87, December.
  30. Timothy Besley & Maitreesh Ghatak, 2001. "Government Versus Private Ownership Of Public Goods," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1343-1372, November.
  31. 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.
  32. Rocio Ribero & Daniela Del Boca, 2001. "The Effect of Child-Support Policies on Visitations and Transfers," American Economic Review, American Economic Association, vol. 91(2), pages 130-134, May.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:esx:essedp:560. 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: (Essex Economics Web Manager)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.