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A mechanism design approach to child custody allocation in divorce

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  • Tilak Sanyal

    (Shibpur Dinobundhoo College)

Abstract

The paper considers a household family comprising of husband, wife and their child. Each parent consumes a private good and contributes voluntarily for a household public good which is child’s welfare. When divorce occurs, the court has an ex ante transfer mechanism for the parents such that truthful revelation of valuation of child’s welfare by each parent becomes strategyproof. Based on this, the sole custody of child is assigned to the parent having the highest value. We find that the transfer mechanism of the court fails to satisfy ex post individual rationality of some types of the parents. We also show that the court’s mechanism bundled with an appropriate child support order achieves higher child’s welfare and satisfies individual rationality only if the non-custodial parent is extremely altruistic in nature. Thus the paper successfully explains widespread prevalence of non-payment of child support from a perspective which was not discussed previously. More significantly, the paper ends with a policy prescription of replacing the conventional child support system by an equivalent amount of transfer from the government to the custodial parent, and shows that it has the potential to correct the intrinsic loopholes of child support.

Suggested Citation

  • Tilak Sanyal, 2019. "A mechanism design approach to child custody allocation in divorce," European Journal of Law and Economics, Springer, vol. 47(3), pages 389-406, June.
  • Handle: RePEc:kap:ejlwec:v:47:y:2019:i:3:d:10.1007_s10657-019-09618-5
    DOI: 10.1007/s10657-019-09618-5
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    References listed on IDEAS

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    1. Flinn, Christopher J, 2000. "Modes of Interaction between Divorced Parents," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(3), pages 545-578, August.
    2. Céline Le Bourdais & Sung-Hee Jeon & Shelley Clark & Évelyne Lapierre-Adamcyk, 2016. "Impact of conjugal separation on women’s income in Canada: Does the type of union matter?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 35(50), pages 1489-1522.
    3. Laura Tach & Alicia Eads, 2015. "Trends in the Economic Consequences of Marital and Cohabitation Dissolution in the United States," Demography, Springer;Population Association of America (PAA), vol. 52(2), pages 401-432, April.
    4. Daniela Del Boca, 2003. "Mothers, fathers and children after divorce: The role of institutions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(3), pages 399-422, August.
    5. Del Boca, Daniela & Flinn, Christopher J, 1995. "Rationalizing Child-Support Decisions," American Economic Review, American Economic Association, vol. 85(5), pages 1241-1262, December.
    6. Rocio Ribero & Daniela Del Boca, 2001. "The Effect of Child-Support Policies on Visitations and Transfers," American Economic Review, American Economic Association, vol. 91(2), pages 130-134, May.
    7. Tilak Sanyal & Vivekananda Mukherjee, 2019. "On General and Specific Transfers for Child Support in Divorce," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(1), pages 197-213, March.
    8. Daniela Del Boca & Rocio Ribero, 2003. "Visitations and Transfers After Divorce," Review of Economics of the Household, Springer, vol. 1(3), pages 187-204, September.
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    Cited by:

    1. Li-Ju Chen, 2021. "Female policymakers and educational expenditures: cross-country evidence," European Journal of Law and Economics, Springer, vol. 51(1), pages 129-155, February.

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    More about this item

    Keywords

    Marriage; Divorce; Strategyproofness;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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