Sanford Braver on the Economics of Divorce

On Wapiti's recommendation, I checked out Divorced Dads: Shattering the Myths, by Sanford Braver, a psychology professor at Arizona State University. The book examines a number of ways in which family law is heavily biased against fathers, and I hope to review the book in more detail in coming posts; however, the particular data that interested me were those dealing with the economics of divorce.

Chapter four of Divorced Dads deals with the way post-divorce standards of living are calculated. Braver explains that standards of living are calculated as ratios to the poverty level income for a family of a particular composition, and provides the following vignette:

[L]et's make up a hypothetical but typical family and see how divorce might affect their standard of living (the calculations are summarized in Table 4.1 [shown]). Since our sample became divorced in 1987, we will be using 1987 figures throughout the chapter. Later, we'll report the computations on our real families.

Let's assume that Rachel and Jeff have two children. Before divorce, he earned $31,000, while she earned $16,733. Their combined family income was therefore $47,733, 4.14 times the poverty level, giving them an income-to-needs ratio of $4.14 ($47,733 divided by $11.519). they divorce, and Rachel gets custody of the two children. Suppose that after the divorce, Jeff pays $500 per month, or $6000 annually in child support, and Rachel increases her work hours (as most mothers in our sample in fact do) and now earns $20,000. Her combined income including child support she receives is $26,000. Hers is now a one-parent/two-child household; the poverty level for this sort of family is $9,151.

For Rachel's standard of living to remain the same, exactly 4.14 times the poverty level, she would have needed to take in $37,885 ($9,151 x 4.14) in total, in salary and child support. Instead, her income-to-needs ratio is now only 2.84 $26,000 divided by $9,151). So her standard of living is now only 69 percent of what it was (2.84, the post-divorce income-to-needs ratio divided by 4.14, the pre-divorce income to needs ratio); it has declined 31 percent. (If the ratio of post-divorce divided by pre-divorce standard of living is less than 100 percent. (If the ratio of post-divorce divided by pre-divorce standard of living is less that 100 percent, subtract the number from 100 percent to get the percent drop or decline.* If the ratio of post-divorce divided by pre-divorce standard of living is more than 100 percent, subtract 100 percent from the number to get the percent gain.)

Jeff's is now considered a single adult/no children household; the poverty level for him is $5,909. For Jeff's standard of living to stay the same, again exactly at 4.14 times the poverty level, he would need to have $24,463 ($5909 x 4.14) left in income after paying child support. Instead, he actually has a little more, $25,000, left. His income-to-needs ratio is now 4.23 $25,000 divided by $5,909). His standard of living is now 102 percent (4.23 divided by 4.14) of what it was before the divorce, a gain of 2 percent.

Table 4.1: Figuring Rachel & Jeff's Post-Divorce Changes in Standard of Living

	Jeff	Rachel	Combined
Pre-Divorce Salary	$31,000	$61,733	$47,733
Pre-Divorce Needs			$11,519
Pre-Divorce Income-to-Needs Ratio			4.14
Post-Divorce Salary	$31000	$20,000
Child-Support	($6000)	$6000
Total Income after Child Support Paid	$25,000	$26,000
Post-Divorce Needs	$5,909	$9,151
Post-Divorce Income-to-Needs Ratio	4.23	2.84
Post-Divorce/Pre-Divorce	102%	69%
Gain/Loss	2%	-102%

Although this method seems fairly straightforward in figuring outhow divorce might affect standards of living, I came to recognize that the method used by Weitzman, and sometimes others (including us) in calculating the "needs adjusted income" was highly misleading and seriously inaccurate for several reasons, which I'll describe in detail next.

Braver goes on to enumerate the difficulties with these calculations:

• Taxes: Custodial parents enjoy multiple tax advantages that non-custodial parents do not.

  • Dad pays taxes on the child support; Mom does not.

  • Mom gets a tax credit for any child care expenses; Dad does not, even when he must make childcare expenditure during visitation periods.

  • Mom's taxes are calculated from the tables for a "head of household"; Dad's taxes are calculated from the much-higher "single" tables.

  • Mom takes the exemptions and credits for household members; Dad does not. (I should add here that this can be, or used to be, negotiated.)

  • Mom's income-to-family-size ratio might make her eligible for the EITC.

• Expense Allocation: The needs ratios shown assume that the custodial parent alone spends money on the children, but in fact non-custodial parents almost always make contributions beyond child-support awards.

  • Two-thirds of Dads report buying clothes for their children.

  • Dad bears the visitation expenses. Not just travel expenses, but all the food, recreation, and child-care during visitation periods, during which he is paying twice for the children's upkeep. (This particular injustice was so egregious that child-support tables were recalculated in 1996 to reflect visitation. But the studies of the 1980s that purported to show female post-divorce immiseration did not.)

Braver recalculates the post-divorce standards of living for his typical family after correcting for these factors, and finds that Jeff now suffers a 15 percent drop in his standard of living, while Rachel suffers only a 5 percent drop. But Braver doesn't end here. He enumerates several other expenses that non-custodial parents must endure:

• Notwithstanding his titular "single" status, Dad must still maintain a residence of sufficient size to accommodate his children during visitation.

• Dad has no say about where Mom chooses to take the children. If she moves out-of-state, or even out of the country, Dad still bears the transportation expenses for visitation.

• Dad's are often ordered to pay medical and dental expenses and insurance as part of the divorce decree, independent of child-support awards.

• Dad usually moves out. Thus Dad must pay for all expenses of setting up a new household. On top of which, he must typically acquire new housing at a much higher price than that which Mom continues to enjoy at the old residence.

Braver brings these revised criteria to his own study with more recent data. He finds that the medium-term economic impact of divorce appears to be evenly distributed between men and women. But he adds an important caveat about the longer term impact:

There are at least two reasons to believe that the earlier we study the economic impact, the more disproportionately disadvantageous to mothers it will appear. Put another way, the longer we wait before assessing teh impact of the divorce, the less it will appear that mothers are disadvantaged. The first reason is that as time goes on, women will progressively upgrade or rehabilitate their education or job skills, earn promotions, and work more hours (as the children age), all of which will help them earn more.

The second factor is remarriage. Statistics show that 75 percent of women and 80 percent of men will remarry, the vast majority within seven years after the divorce. When a woman remarries, she tends to marry someonen who brings substantial income, but relatively few expenses. When a man remarries, however, he tends to marry someone who brings expenses proportinately greater than income. Duncan and Hoffman found that five years after divorce, even the minorithy of women who had not remarried had risen from a 30 percent declind to within six percent of their pre-divorce standard of living, due to their enhanced salary, while those who had remarried now had a living stnadard 25 percent higher than in the year before their divorce.** And Randal Day and Stephen Bahr found that males who remarried suffered a 3 percent decline in per capita family income (compared to their predivorce levels) whiole females experienced a 14 percent increase.

* Braver belabors what appears to be pretty elementary math because this was exactly how Weitzman screwed up her study. As she later admitted (and blamed a grad student for), her "74 percent decline" in a woman's living standards was actually a 26 percent decline.

** My impression is that these values were calculated using the methods of Table 4.1. Using Braver's revised criteria, I would assume that the disparity would be even more dramatic.