Welfare effects of fixed and percentage-expressed child support awards (original) (raw)
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Child support guidelines and divorce incentives
International Review of Law and Economics, 2012
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.
An Evaluation of Child Support Reforms
Labour, 1996
Absrrucr. Among the policy changes proposed in the United States for determining equitable child support orders there is the proportionate order, which consists in setting orders as a percentage of the non-custodial parent's income and wage withholding which involves the improvement of the procedure of collection of child support payments with the use of automatic withholding.
Harvard Journal on Legislation, 2008
What is the appropriate amount of child support to require in particular cases? How should we take account, if at all, of subsequent events such as either parent's remarriage? It seems obvious that the answers to such questions ought to turn on our purpose in requiring support payments in the first place. But while fixing the amount of child support can be politically contentious, and has attracted the attention of partisans on both sides of the gender gap, the literature contains no systematic examination of support rules in light of their underlying policy purpose. This article identifies the three fundamental policy purpose that explain why we require child support, shows that the federally-required guidelines that determine most support orders are not usually designed to further those policies, and shows why this design failure is the unintended but inevitable consequence of the economic anaysis most states rely upon for constructing their guidelines. The Article offers a ne...
The Law and Economics of Child Support Payments
List of figures vii List of tables ix List of boxes xi List of contributors xiii Preface xv 1 Child support payments: a review of current policies William S. Comanor 2 Child support and the problem of economic incentives Robert J. Willis 3 Child support guidelines: underlying methodologies, assumptions, and the impact on standards of living
Child Support Guidelines: The Good, the Bad, and the Ugly
2011
Child support guideline systems do more than simply determine the amount of income to be transferred from the noncustodial to the custodial household. They create incentives, one way or another, for spouses to divorce and seek custody and support payments. We examine three cases found in North America, and find that the common method of income shares provides a decent guideline that does not create any perverse incentives for divorce. Percentage-of-obligor-income methods do worse than other systems, and can cause increases in divorce rates for families in which one spouse earns a high income. Finally, the Canadian system, which is designed to transfer large amounts of net wealth, creates very large negative incentives for marriage stability.
Child Support Guidelines: Will They Make a Difference?
Journal of Family Issues, 1991
This article uses data from the Current Population Survey to examine the extent to which the new child support guidelines being developed by the states in response to the Child Support Amendments of 1984 and the Family Support Act of 1988 can be expected to increase child support awards and payments. The analysis focuses on the guidelines being developed in Wisconsin, Colorado, and Delaware, which are representative of those being implemented nationwide. The results suggest that the new guidelines will increase child support payments by somewhere between 47% and 54%. Child support awards are predicted to increase by between 77% and 88%, depending on the guideline being considered. Compliance with the new guidelines is predicted to be modest, averaging 61% across marital status groups, but this evidence on compliance is very tentative because it is based on an analysis of the current system and the results may not carry over to the new system.
CHILD SUPPORT IN THE UNITED STATES
Family Court Review, 2005
This article reports on the results of a telephone survey conducted with a random sample of households screenedfor eligibility to receive child support in the state of Colorado. Despite the recent enactment of ambitious child legislation at the state and federal levels, the accounts of 731 custodial parents reveal a massive level of unmet need, with child support problems being most extreme for those never married to the child's other parent. These mothers typically lack an order establishing a legal obligation to pay child support and have incomes that fall below the poverty level. Overall, women of Colorado with child support orders received only about half of the support they were due, and 73 per cent of all women due support reported thar they had experienced problems in collecting support either currently or in the past. The average amount of back due child support owed to the 6Oper cent of women in the sample who reported an arrearage was $12,000. Analysis revealed that payment behaviour tracked with the length of time since separation with payment patterns worsening over time and irregular visitation a d o r the presence of problem amund child access. Female obligors exhibited the same paymentpatterns as their male counterparts but were more apt to maintain visitation. The article documents the dramatic, negative economic consequences of irregular or missing child support payments for custodial parents, and discusses the additional legal and financial commitments needed to improve the situation. The efficacy of private child support transfers to achieve an adequate standard of living for all children is called into question.