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Income Effects of Divorce in Families with Dependent Children

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Abstract
Marital 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.

Suggested Citation

  • Bratberg, Espen & Tjøtta, Sigve, 2002. "Income Effects of Divorce in Families with Dependent Children," Working Papers in Economics 20/02, University of Bergen, Department of Economics.
    • Handle: RePEc:hhs:bergec:2002_020
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    1. Banks, James & Johnson, Paul, 1994. "Equivalence Scale Relativities Revisited," Economic Journal, Royal Economic Society, vol. 104(425), pages 883-890, July.
    2. Rolf Aaberge & Tom Wennemo & Anders Bjorklund & Markus Jantti & Peder J. Pedersen & Nina Smith, 2000. "Unemployment Shocks and Income Distribution: How did the Nordic Countries Fare during their Crises?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 77-99, March.
    3. Saul D. Hoffman & Greg J. Duncan, 1995. "The Effect of Incomes, Wages, and AFDC Benefits on Marital Disruption," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 19-41.
    4. Richard V. Burkhauser & Greg J. Duncan & Richard Hauser & Roland Berntsen, 1990. "Economic Burdens Of Marital Disruptions: A Comparison Of The United States And The Federal Republic Of Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 36(4), pages 319-333, December.
    5. Sigve Tjøtta & Kjell Vaage, 2008. "Public transfers and marital dissolution," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(2), pages 419-437, April.
    6. Suzanne Bianchi & Lekha Subaiya & Joan Kahn, 1999. "The gender gap in the economic well-being of nonresident fathers and custodial mothers," Demography, Springer;Population Association of America (PAA), vol. 36(2), pages 195-203, May.
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    8. Jenkins, Stephen P & Cowell, Frank A, 1994. "Parametric Equivalence Scales and Scale Relativities," Economic Journal, Royal Economic Society, vol. 104(425), pages 891-900, July.
    9. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-1082, September.
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    Cited by:

    1. Nabanita Datta Gupta & Leslie Stratton, 2010. "Examining the impact of alternative power measures on individual time use in American and Danish couple households," Review of Economics of the Household, Springer, vol. 8(3), pages 325-343, September.
    2. Øystein Kravdal & Emily Grundy & Katherine Lisa Keenan, 2018. "The increasing mortality advantage of the married: The role played by education," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 38(20), pages 471-512.
    3. Carole Bonnet & Bertrand Garbinti & Anne Solaz, 2021. "The flip side of marital specialization: the gendered effect of divorce on living standards and labor supply," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(2), pages 515-573, April.
    4. Sigve Tjøtta & Kjell Vaage, 2008. "Public transfers and marital dissolution," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(2), pages 419-437, April.
    5. Datta Gupta, Nabanita & Stratton, Leslie S., 2008. "Institutions, Social Norms, and Bargaining Power: An Analysis of Individual Leisure Time in Couple Households," IZA Discussion Papers 3773, Institute of Labor Economics (IZA).
    6. Berntsen, Kjersti Norgård & Kravdal, Øystein, 2012. "The relationship between mortality and time since divorce, widowhood or remarriage in Norway," Social Science & Medicine, Elsevier, vol. 75(12), pages 2267-2274.
    7. Bram Hogendoorn, 2022. "Why do Socioeconomic Differences in Women’s Living Standards Converge After Union Dissolution?," European Journal of Population, Springer;European Association for Population Studies, vol. 38(3), pages 577-622, August.
    8. Cécile Bourreau-Dubois & Myriam Doriat-Duban & Jean-Claude Ray, 2014. "Child support order: how do judges decide without guidelines? Evidence from France," European Journal of Law and Economics, Springer, vol. 38(3), pages 431-452, December.

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    More about this item

    Keywords

    Marital dissolution; income distribution; income changes; child custody; equivalence scales.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, 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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