Can Adequate Child Support Be Legislated? Responses to Guidelines and Enforcement

I. INTRODUCTION In response to the high levels of poverty faced by children of divorced parents, federal and state governments adopted a number of policies during the 1980s aimed at increasing child support awards and payments. These laws required all states to have numerical child support guidelines to be used by parents who could not agree on their own and to increase state enforcement of delinquent child support awards. Implicit in much of the policy discussion about divorce is the assumption that within marriage parents will jointly act in the best interest of their children, but that after divorce children may not be adequately provided for, and legislative action is required. In the extreme, this view is represented by the stereotype of the deadbeat dad, a term that describes a father who doesn't care enough about his children to continue any involvement with them either in terms of time or money. Similarly, economic models often assume a noncooperative outcome in which the non-custodial father will not provide what he did during marriage (e.g., Weiss and Willis, 1985). Our article makes several contributions to the literature on the determinants of child support by absent fathers. In contrast to almost all of the work on this topic that has been based on noncooperative models, we develop a theoretical model in which some families may be able to achieve a cooperative outcome, which increases the total resources available to children. In particular, our model identifies three different types of outcomes: (1) cooperative and self-enforcing; (2) noncooperative and self-enforcing; and (3) noncooperative and state-enforced. Each of these outcomes has different implications for the well-being of children and for the level of government involvement in divorce settlements. We then derive the conditions under which families can achieve each of these outcomes, and we specifically model how policy variables affect whether or not a particular outcome is achieved, the levels of payments, and levels of compliance (conditional on the type of outcome). Our empirical work provides reduced-fo rm evidence that is consistent with a model that distinguishes these different types of outcomes, and we find that policies can affect the type of outcome, as well as the level of child support awards and payments. Section II of this article provides background and motivations for our topic. We develop a general theoretical framework in section III and compare outcomes under assumptions of symmetric versus asymmetric information. Section IV incorporates the legal environment by modeling the impact of guidelines and state enforcement efforts on the probability the custodial parent (CP) will impose the guidelines, the level of child support awards, and the noncustodial parent's (NCP's) compliance. In section V we interpret comparative statics. Section VI examines the determinants of reduced-form models of the probability of a court-ordered child support award and shows that the predictions of the model are consistent with data on the characteristics of divorce settlements and parental behavior for those with voluntary versus court-ordered settlements. A summary of the findings and policy implications concludes. II. BACKGROUND AND MOTIVATION In contrast to the marriage literature, which predominately uses cooperative bargaining models, the literature on divorce generally assumes that divorcing parents are unable to reach cooperative agreements. For example, Weiss and Willis (1985) model parental expenditures on children after divorce as a principal-agent problem in which the absent father cannot verify the child expenditures made by the mother. This problem of asymmetric information leads to an inefficient, noncooperative outcome. Del Boca and Flinn (1995) also use a noncooperative model to examine the government's choice of compliance outcomes. Others have analyzed compliance with child support awards using an economics of crime framework (Beron, 1988; Beller and Graham, 1991; Chambers, 1979). …