Intra-household Allocation of Resources: Inferences from Non-resident Fathers’ Child Support Payments

Abstract

A large proportion of divorced and separated fathers form new partnerships. The new partner's preferences are likely to put a much lower weight (if any) on expenditures on the man's children from his previous union. As a consequence, his own and his partner's income would have different impacts on his child support payments if partners' relative incomes affect bargaining power in household decisions. This paper exploits within-father variation in the British Household Panel Survey (1991-2003) to estimate the impacts of partners' incomes on child support payments. We find that a higher share of father's income in household income increases the probability of paying child support and its amount relative to household income.