Income Growth among Nonresident Fathers: Recent Evidence from Wisconsin

Background/Purpose: An influential 1993 study by Phillips and Garfinkel (published in Demography, volume 30) found that the incomes of nonresident fathers in Wisconsin increased in the seven years following divorce or nonmarital birth. Based on these results, some argued that even if nonresident fathers did not initially have much ability to pay child support, we could expect them to pay moderate amounts as they aged. However, this study was conducted during the late 1980s, a time of favorable macroeconomic conditions and generally increasing incomes. Since then, there have been some difficult economic periods and the economic opportunities for men with low educational levels have become more constrained. Using Wisconsin administrative datasets, this study updates their analysis to see if its conclusions and policy implications still hold. We ask: What are the poverty rate and the level of earnings and income of nonresident fathers? Do these increase over time? Whose incomes increase/decrease? What are the implications for child support policy?

Methods: The data come from matched administrative datasets: Wisconsin Court Record data (providing demographic information on fathers, mothers and children in divorce and paternity cases), Wisconsin income tax data, and earnings information from the Wisconsin Unemployment Insurance system. The sample includes approximately 1,100 divorced fathers and 1,200 nonmarital fathers, all of whom had court petitions between 1996 and 2001. The mean and distribution of personal income and earnings of divorced fathers and nonmarital fathers were computed separately in the years before the final divorce judgment or paternity establishment and up to five years after. On the basis of personal income drawn from the tax data, the proportion of fathers under the official poverty line was also calculated. A descriptive multivariate panel analysis explores the characteristics of those whose incomes change the most.

Results: Results from the recent cohort show substantially different results than the earlier study in terms of income levels and trends. The previous study found that mean incomes increased substantially over time for both divorced and nonmarital fathers; in contrast we find only a moderate increase for nonmarital fathers and a slight decrease for divorced fathers. The poverty rate of both groups of fathers is higher than the earlier study, and, in contrast to the earlier study, increase over time. Similar to the previous results, divorced fathers have substantially higher levels of income than fathers of nonmarital births, but the rate of change is higher for fathers of nonmarital births.

Conclusions and Implications: Our descriptive analysis suggests that the economic situation of nonresident fathers is substantially worse in recent cohorts than it was in the 1980s. This has obvious implications for the level of child support we can expect, an important issue for the economic well-being of poor children. Two types of policies are implied: policy efforts that support low-income fathers in finding and sustaining work and paying child support, and policy efforts directed at improving the economic well-being of single-parent families outside the child support system.