The purpose of this project is to explain the determinants of post-divorce settlements. How is the division affected by the income and other characteristics of husband and wife? How important are within marriage investments (e.g., wife works to support husband in school) on the post-divorce outcome? What is the role of the courts in determining this division? How important are children in affecting the total transfer of resources? What are the determinants of the custody arrangements? What are the patterns of the post-divorce compliance with alimony and child support agreements? To what extent is compliance affected by pre-divorce arrangements and what is the role of post-divorce adjustments? It is our belief that information on the actual post-divorce transfers and an understanding of their determinants will provide an important link in understanding the economic costs of divorce. The empirical work is based on an economic theory of the determinants of divorce settlement and custody arrangements. The theory views marriage as a partnership in which children are collective goods in terms of their parents' preferences and shows how these aspects may help answer the above questions. In this project, we plan to test the theory using data from a questionnaire supplement to the Fifth Follow-up National Longitudinal Study of the High School Class of 1972 (NLS 1972) which the investigators designed, in part, for this purpose. It is also proposed to extend the theory to incorporate several factors (e.g., time allocation, investment in marriage and dynamic issues including remarriage) in order to make the theory more directly applicable to data. The hypotheses to be tested concern the relationship between relative earning capacity and divorce settlements; earning capacity and custody agreements; the effect of children on divorce; the effect of specific investments within marriage on divorce; effects of divorce on welfare of children and of each parent; the legal costs of divorce and compliance; and the effects of AFDC and other public transfers on divorce settlements.
