Understanding Child
Support Guidelines
Presentation to the Arizona Child Support
Guideline Committee
June 27, 2008
© 2008
Ira and Tara Ellman
Overview: Four Parts

What do our current guidelines really do?

A look at the numbers they produce

What should the guidelines do?
 Some possible principles
 What principles are favored by Arizona citizens?
 How do they compare to current reality?
 Why do the current guidelines do what they do?
 Examining the theory of current guidelines, and
 why it necessarily produces these results
 What is the alternative?
 How could we do them differently?
2
Part I: A look at current guidelines
 The Classic Choice: Income Shares v. POOI
 Wisconsin: Gross Income POOI State

Support equals flat percent of Dad’s Income




17% for one child,
25% for two, 29% for 3
34% for 5 or more
Mom’s income not considered
 Income Shares: Mom’s income considered

But does it matter? Let’s find out.
3
POOI v. Income Shares
 Assume Dad earns 1000, Mom earns 500
 Assume POOI and Income Shares states both
set support at 17% for one child, as does
Wisconsin
 POOI: 17% of $1000 = $170 in support
 Income Shares: longer route to same place
 Total Parental Obligation = 17% of $1500
 17% of $1500 = $255
 Dad pays 2/3 (1000/1500) of $255
 Which is $170
4
POOI v. Income Shares, continued
 So why does the choice of POOI v.
Incomes shares matter?
 Answer: it’s the rate structure, not the
fact that we look at both incomes
 POOI: flat rats
 Income Shares: declining rates

Example: Arizona
5
Arizona Support Rates, 2005 Guidelines
Support Obligation as a Proportion of Combined Income
Proportion of Combined Income
0.60
Rates start high,
fall steeply
Low and
slowly
falling
above
$8100
0.50
Plummet at
$4200
0.40
0.30
0.20
0.10
0.00
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Combined Monthly Gross Income
Children
1
2
6
6
Arizona & Wisconsin Rates, 1 Child
Support Obligation as a Proportion of Income
For One Child
0.60
Proportion of Income
0.50
0.40
0.30
0.20
0.10
0.00
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Monthly Gross Income
AZ
wisc. average rate
7
Arizona & Wisconsin Rates, 2 Children
Support Obligation as a Proportion of Income
For Two Children
0.60
Proportion of Income
0.50
0.40
0.30
0.20
0.10
0.00
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Monthly Gross Income
AZ
wisc average rate
8
Arizona & Wisconsin Rates, 5 Children
Support Obligation as a Proportion of Income
For Five Children
0.60
Proportion of Income
0.50
0.40
0.30
0.20
0.10
0.00
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Monthly Gross Income
AZ
Wisc. Average Rate
9
One Effect of AZ’s Falling Rates
 Dads with the same
income pay different
rates.


Mom’s rising income
lowers Dad’s rate, not
just his share of joint
obligation.
Might seem fair to
some, unfair to others.
SUPPORT RATE FOR ONE CHILD
Non-Custodial Parent's Income
$500 $1,000 $3,000 $7,000
Custodial
Income
$0
$500
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
n.a.
0.23
0.22
0.20
0.19
0.17
0.15
0.14
0.23
0.22
0.21
0.20
0.18
0.16
0.14
0.13
0.20
0.19
0.18
0.16
0.14
0.13
0.12
0.11
0.13
0.12
0.12
0.11
0.11
0.11
0.10
0.10
Compare Two Dads Who Both Earn $3000
1. Mom earns nothing: Dad pays 20% or $600
2. Mom earns $3000: Dad pays 14% or $420
10
Second Effect of AZ’s Falling Rates
 Poor Mom realizes
SUPPORT RATE FOR ONE CHILD
limited benefit from
Dad’s rising income.


Dad’s rising income
lowers his rate
Reduces the impact of
his rising share of their
joint obligation
Non-Custodial Parent's Income
$500 $1,000 $3,000 $7,000
Custodial
Income
$0
$500
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
n.a.
0.23
0.22
0.20
0.19
0.17
0.15
0.14
0.23
0.22
0.21
0.20
0.18
0.16
0.14
0.13
0.20
0.19
0.18
0.16
0.14
0.13
0.12
0.11
0.13
0.12
0.12
0.11
0.11
0.11
0.10
0.10
Compare Two Moms Who Both Earn $500
1. Dad earns 1000: pays 22% or $220
2. Dad earns 7000: pays 12% or $840
What is the impact of this result?
11
Gauging Impact of Support Amounts
 How does the support amount affect each of
the two households?
 Gauging that is not easy. You must compare


Households of different composition
Which therefore need different amounts of
money to achieve the same living standard.
 But for lower income households, the official
poverty threshold is one common measure


Simple to understand
Often used and therefore “standard”
12
Understanding Poverty Threshold
 Developed in 1963 by Mollie Orshansky, a statistician




in the Social Security Administration (formerly a
Research Clerk with FDR’s Children’s Bureau
It’s basically the cost of minimal grocery market
basket times 3.
“Updated” annually by Census Bureau for price of the
market basket
Actual poverty judgments range from 125% to 180%
of the “poverty threshold”
But “poverty threshold” still a standard benchmark
13
Some Monthly Income Benchmarks
 Poverty level
 2-adult, 1-child household:
 “200 % Poverty”
 Single person
 Median income
 for all US households:
 80th Percentile income
 For all US households:
 95th percentile income
 for all US households:
2002
2007
$1,207
$ 2,414
$ 780
$1,391
$ 2,782
$ 899
$3,550
$7,001
$12,500
14
CHART 3 INTRO
MIDDLE INCOME
RANGE OF CUSTODIAL HOUSEHOLD OUTCOMES
EXAMPLE OF ONE-CHILD FAMILY WITH $3550 COMBINED INCOME
(MEASURED AS PERCENT OF POVERTY LEVELS)
Intact family was at
500%
300% of poverty level
Situation: Middle Income
Household with One Child
450%
Percent of Poverty Level
400%
350%
Outcomes
AFTER
300%
payments
250%
200%
Custodial
HH before pmts
Possible
outcomes
for
Custodial HH after pmts
Mom and
Child BEFORE
Intact HH
100
pct of poverty level
payments.
150%
100%
50%
0%
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Custodial Parent's Share of Combined Income
Mom’s Income Share
15
CHART 5 LOW INCOME MOM
RANGE OF CUSTODIAL HOUSEHOLD OUTCOMES
EXAMPLE OF ONE-CHILD FAMILY WITH $3550 COMBINED INCOME
(MEASURED AS PERCENT OF POVERTY LEVELS)
Payment helps, but not
nearly enough to restore
old living standard.
500%
Percent of Poverty Level
450%
After $468
payment,
Mom
400%
and Child
at
350%
150% of
300%
poverty
250%
200%
Custodial HH before pmts
Mom
earns 30% of
Custodial HH after pmts
Intact HH
combined
income, or
pct of poverty level
$1065,100near
poverty level.
150%
100%
50%
0%
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Custodial Parent's Share of Combined Income
Situation: Low income Mom from a middle-income intact household.
16
Three Moms with 1 Child
Each Earns $1000
SUPPORT
NON-CUST SUPPORT
CUST. PCT
PAYMENT
INCOME $
RATE
POVERTY
$
NONCUST.
PCT
POVERTY
LOW INCOME
Combined $1500
500
22%
110
107%
50%
MIDDLE INCOME
Combined $3500
2500
19%
471
142%
260%
HIGH INCOME
Combined $7000
6000
13%
781
173%
668%
Low
Income
Dad
High
Income
Dad
Why Doesn’t Higher Income Dad Help More?
Answer: Rates Fall as Dad’s Income Rises
17
HCART 4 TWO CHILDREN
RANGE OF CUSTODIAL HOUSEHOLD OUTCOMES
EXAMPLE OF ONE-CHILD FAMILY WITH $3550 COMBINED INCOME
How two middle- class
children can have very
different outcomes:
(MEASURED AS PERCENT OF POVERTY LEVELS)
500%
450%
Percent of Poverty Level
Falls near
400%
poverty with
350%
low earning
Mom. 300%
250%
200%
Custodial HH before pmts
HH after pmts
Keeps Custodial
middle
class life
Intact HH
style with
100 pct high
of poverty earning
level
Mom .
150%
100%
50%
0%
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Custodial Parent's Share of Combined Income
Conclusion: Where noncustodial parent earns the majority of income,
our guidelines do not protect children from large declines in living
18
standard when their parents separate.
Overview: Four Parts





What do our current guidelines really do?
 A look at the numbers they produce
What should current guidelines do
 Some possible principles
 What principles are favored by Arizona citizens
 How do they compare to current reality?
Why do the current guidelines do what they do?
 Examining the theory of current guidelines, and
 Why it necessarily produces these results
What is the alternative?
What is the alternative?
 How could we do them differently?
19
Goals of Support Guidelines
 Protect Child Well-Being

Especially important for low-income CP’s
 Recognize Dual Parental Support Obligation

Explains why we require support even when
CP has adequate income for child
 Avoid Gross Disparities in Living Standard

Explains why we go beyond basics
 Balance above against Earner’s Priority
Principle
20
1. Measurable Child Well-Being
B
A
The solid or the dashed line?
21
Well-Being, continued
Empirical literature suggests the solid line--but
•Value judgments cannot be avoided
•` What counts as well-being?
• Long v. Short term?
• How to measure and aggregate?
22
Well-Being, continued
Possible Working Assumptions
 Curve steep to Point A, the “minimum decent living
standard”—perhaps 150% of poverty threshold
 Curve begins to flatten at Point B

Perhaps 60th to 80th Percentile of household income
 As well-being returns decline, so does the child well
being rationale for any support claim on obligor.
23
Possible Well-Being Principle
 First Purpose of Child Support is to Ensure
Child Well-Being
 The lower is the custodial household income,


the more well-being a support dollar buys
And therefore the stronger is justification for
requiring support from the obligor
 Summary: The lower the CP income, the
more we should ask of the obligor
24
Dual Obligation Principle
 Explains why we require support even when
 CP has more money than NCP
 CP has lots of money
 Multiple reasons for Dual Obligation
 Moral claims
 Fairness to CP
 Maintain obligor’s authenticity as parent
 Dual Obligation says little about how much
 Fair share of the well-being amount
 Nominal may be enough when WB not at
issue
25
Gross Disparity Principle
 Fairness claim for child, not Well-Being claim
 Shield innocent victim of break-up from
disproportionate living standard loss
 Fairness argument more powerful if child
 Had enjoyed higher standard for some time
 Sees Obligor’s new family enjoying high
standard
 Problem: Windfall benefit to CP
 Compromise: Avoid “Gross” Disparity
26
Gross Disparity, continued
Two Possible Gross Disparity Principles
 Version One: where family was intact
 Child’s living standard should not decline too
much more than Dad’s
 Version Two: where there was no long-term
intact family

Child’s living standard should not be grossly
inferior to Dad’s
 When Relevant? When there is
 A high-income obligor, and
 We are at flatter end of the Well-Being curve
27
Earner’s Priority Principle
 Everyone keeps what they have unless there’s a very
good reason to take it from them.

Especially the poor.
 For poor obligors: Self-support reserve trumps even
child well-being
 For higher income obligors
 Gross Disparity a less powerful counterweight to
EPP than child well-being:
 Hence we allow some disparity
 Validates objection to “hidden alimony”
 But Child Well-Being is “a very good reason”
28
EPP continued
Possible EPP Principles
 For low-income obligor:
 Award only nominal amounts from
impoverished obligors
 Never reduce obligor income below poverty
levels.
 For higher income obligor
 The award should preserve a living standard
advantage over CP household, if child wellbeing not at risk:


child has a “decent minimum” or
Something more than decent minimum
29
Overview: Four Parts

What do our current guidelines really do?

A look at the numbers they produce

What should current guidelines do
 Some possible principles
 What principles are favored by Arizona citizens
 How do they compare to current reality?
 Why do the current guidelines do what they do?
 Examining the theory of current guidelines, and
 Why it necessarily produces these results
 What is the alternative?
 How could we do them differently?
30
What Do Arizona Citizens Believe?
How Do You Ask?
 Attitudes or support amounts?
We asked about both
 Their relationship provides insights
 But ultimately, amounts matter most

 Do not anchor
 If you want to know what people think, do
not first tell them what others think
31
Who We Asked
 Members of Pima County jury pool
 65% to 70% response rate to long forms
 This data based on N of 407, of whom:
 55% were women
 62% were married, 35% were divorced
 69% had children
 12% had paid support, 18% had received it
 97% graduated high school, 25% had B.A.
 5.6% earned less than $15,000
 46% earned more than $60,000
32
Of the 30% who have been in the child support
system, nearly all the Obligors were men, and nearly
all the Custodial Parents were women
33
What We Ask: Support Amounts
 One child (9 year old boy)
 Mom is CP, Dad is support obligor
 Son “lives mostly with Mom, but Dad sees him
often”
 Dad earns $6000, $4000, or $2000 a month in
“take-home pay”.
 Mom: $5,000, $3,000, or $1,000
 Everyone asked about all nine income
combinations
 Rs either Name or Choose a support amount
34
The Exact Question
We want to know the amount of child support, if
any, that you think Dad should be required to pay
Mom every month all things considered. What will
change from story to story is how much Mom earns,
and how much Dad earns. There is no right or wrong
answer; just tell us what you think is right. Try to
imagine yourself as the judge in each of the following
cases. Picture yourself sitting on the bench in a
courtroom needing to decide about what should be
done about ordering child support in the case and
trying to decide correctly. To do so, you might try
putting yourself in the shoes of Mom or of Dad or
both, or imagine a loved one in that position.
35
Respondents’ Average Support Function
1. Three lines, not 1—Mom’s income matters and POOI
implicitly rejected
2. Rates on Dad’s income higher when Mom’s income lower
Low
income
mom
High
Income
mom
36
Lesson One
 Respondents agree that as Mom’s $ ↓
 Dad
should pay more in dollars, and
 The rate applied to Dad’s income should
go up
 This is not POOI.
 Is it Income Shares?
 Do
they believe Dad’s rate should go down
as his income goes up?
 No. See next chart
37
Support Payment as Percent of Dad’s Income
Mom’s Income is $1,000 monthly
30%
25%
20%
15%
10%
Survey
Means
5%
2
4
Dad's Income in Thousands
6
Arizona
Guideline
s
38
Support Payment as Percent of Dad’s Income
Mom’s Income is $3,000 monthly
30%
25%
20%
15%
10%
Survey Means
5%
2
4
Dad's Income in Thousands
Arizona
6 Guidelines
39
Support Payment as Percent of Dad’s
Income Mom’s Income is $5,000 monthly
Support Payments As Percent of Dad's
Income: CP Income is $5000
30%
Survey
Means
Arizona
Guidelines
25%
20%
15%
10%
5%
2
4
6
Dad's Income in Thousands
40
Rate Rules
Method
As Mom’s
Income Rises
As Dad’s Income
Rises
POOI
Unchanged
Unchanged
Income Shares
Go Down
Go Down
Pima County
Citizens
Go Down
Unchanged
41
Key Points on Rates
 Pima County citizens reject both POOI &
Income Shares
 They believe in a “flat tax” for child support

Income Shares Guidelines have a regressive
rate structure
 They believe the flat rate on Dad should be
higher when Mom’s income is lower

This is not POOI either
 This view about rate structure shared by men
and women: no difference between them
 But how does this translate to support $ ?
42
Child Support Payments
CP Income $1,000
1300
Support Payment
1100
survey
median
900
700
Guidelines
500
Survey
25th
Percenttile
300
100
0
2
4
6
8
Non Custodial Parent Income
43
Child Support Payments:
CP Income $3000
1300
Support Payment
1100
900
survey
median
700
guidelines
500
Survey 25th
Percentile
300
100
0
2
4
6
8
Non Custodial Parent Income
44
Child Support Payments:
CP Income $5000
1300
Monthly Support Payment ($)
1100
900
survey
median
700
guidelines
500
Survey 25th
Percentile
300
100
0
2
4
6
8
Non Custodial Parent Income ($000)
45
What About Other Income Share
States?
• Which one to pick?
• Studies by Jane Venohr found that
– There are 12 net income, income share states
– Of these, Iowa had the median child support
amounts
• So, how do our respondents mean support
amounts compare to the support levels
required in Iowa?
46
Iowa Support Amounts Compared to Respondents’ Preferred Amounts
CP
Income
↓
NCP
Income
→
2000
4000
6000
1000
Survey
461
956
1451
Iowa
456
804
1122
Survey
379
748
1117
Iowa
404
748
966
Survey
298
541
784
Iowa
374
668
954
3000
5000
•Middle Cell: Identical
•Top Row (Poor Moms): Public wants higher amounts
•Bottom Row (Comfortable Moms) Public wants lower
amounts
47
Key Points on Amounts
• Respondents generally favor amounts
higher than Arizona guidelines
• Compared to Iowa they want
– Higher amounts for low-income CPs
– Lower amounts for high-income CPs
– This follows from Well-Being and EPP
principles, consistent with Dual Obligation
– We must ask about higher NCP to find out
about Gross Disparity
• Men and Women agree on this rate
structure
– But do they agree about amounts?
48
Child support by gender of respondent
cp 5,000 males
cp 5,000 females
cp 3,000 males
cp 3,000 females
cp 1,000 males
cp 1,000 females
$1,800
$1,600
Child Support
$1,400
$1,200
Mom has
Mom has
$5000
Mom
has$1000
$3000
$1,000
$800
$600
$400
$200
$0
2,000
4,000
6,000
Dad's Income
49
Further Data On the Way
 Two children, higher incomes for NCP
 Gender reversals
 Attitudes about support principles and how they





relate to support amounts
Are amounts affected by whether the parents were
married, or the length of their relationship
Impact of visitation arrangements on amounts
Impact of visitation frustration on support amounts
Anchoring Effects: a possible way to tame gender
differences
Impact of Showing subjects the parties’ post-transfer
incomes
50
Overview: Four Parts

What do our current guidelines really do?

A look at the numbers they produce

What should current guidelines do
 Some possible principles
 What principles are favored by Arizona citizens
 How do they compare to current reality?
 Why do the current guidelines do what they do?
 Examining the theory of current guidelines, and
 Why it necessarily produces these results
 What is the alternative?
 How could we do them differently?
51
What Current Guidelines Are Not
or, Guideline Myths
 Not estimates of the cost of raising a child
 Can’t be, because what a child costs depends on
the living standard you want to buy for him or her
 Not estimates of what it takes to provide a
child with the marital living standard

That’s not often practical or possible
 Not based on estimates of
 what custodial households need, or
 what it’s fair to expect noncustodial parents to pay
 So then—where do they come from?
52
Where the Guideline Numbers Do
Come From
 From a very complicated theory that starts from
a simple idea
 The Simple Idea: Base Guidelines on What
Parents Spend on children in Intact Families
 The Complicated Theory arises because:



How do you decide what counts as a child
expenditure?
How do you measure the expenditures you want
to count?
The Devil—and the Policy—is in these details
53
The Two Key Questions
 1. How are child expenditures defined?
 what is consultant trying to measure?
 This is a matter of Concept
 2. How are expenditures, so defined,
measured?
Is our measure any good?
 This is a question of Implementation

54
The Concept: Which Expenditures?
 Why do we care what parents in intact families
spend on their children?
 We might think it tells us
 how much money the CP needs to provide the
child with the living standard enjoyed by the
intact family
 If that purpose, we should measure
 all parental expenditures that confer a benefit
on the child
 Question: What did PSI measure?
55
Which expenditures?, continued
What PSI measured
 The numbers in the current support grid are
based on a measure of what




The average intact family
With the same parental incomes as the
parents
And the same household composition
Spends
 But which expenditures of that family?
 Answer: the marginal child expenditures
56
HOW ARE CHILD OUTLAYS DEFINED?
From PSI Report, Pg. 6
57
What Are the Marginal
Expenditures?*
4000
3500
3000
Food
Toys, Clothes
Utilties
Rent
Cars
Total
2500
2000
1500
1000
500
0
Couple
1 child 2 children 3 children
*Illustrative (not actual data)
58
Effect of Marginal Expenditure
Measure: Two Examples
 Assume family earns and spends $3000
monthly, two parents and one child
 Assume the marginal expenditures on the
child are $500—the extra amount they spend
on account of the child.


This is 17%, the Wisconsin figure
For Income Shares, it would become the
“basic support obligation”
 Example 1: Dad and Mom both earn $1500
 Example 2: Dad earns $2500, Mom $500
59
Marginal Expenditure Examples
 Example 1: Mom and Dad each earn half, each




responsible for half the $500, or $250
After support payment
 Mom and child have $1500 + $250 = $1750
 Dad has $1500 - $250 = $1250
 Both worse off, but probably about equally worse
off
Example 2: Mom earns $500, and Dad earns $2500
Dad pays Mom 25/30 or 5/6 or $417
So after payment
 Mom and child have $500 + $417 = $917
 Dad has $2500 - $417 = $2083
 Dad is doing fine, Mom and child in deep DD
60
Why Marginal Expenditure Yields
This Result
 Allocating marginal expenditures works when
both parents have the base income
 If parent’s incomes are very disparate, the
low-income CP Mom lacks the base


Support pays for the extra bedroom, but she can’t
buy the rest of the apartment
Dad retains all of his contribution to intact family’s
base expenditures—and continues to enjoy it
 If Dad’s income is much lower, even his share
of the marginal expenditures may be very
high burden
61
How Are Marginal Expenditures
Estimated?
 This is the implementation issue
 Is there an established way to estimate
marginal expenditures?

No
 How did PSI do it?
62
From PSI Report, Pg. 6
63
Source of Equivalence Table
Two equivalence scales used
 Engel:
families are equivalent when the
same percent of their outlays go to
groceries
 Rothbarth: Adults equivalent when
spending same amount on adult items
 The two estimators yield different
results, and there is no way to test
either. We use Rothbarth
64
How Does Rothbarth Work?
 Assume we have a couple who spend $50,000 a
year. We want to know their marginal expenditures
on their child
 We find that the average couple, with one child who
spend $50,000 a year, spend $1,000 on adult goods.
 We find the average childless couple that spends
$1000 on adult goods

Assumption: their living standard is equivalent
 If that childless couple’s total expenditures are
$40,000, then the first couple’s marginal expenditures
on child are
 $10,000 (50,000 less 40,000)
65
Rothbarth Problems
 Only data is CES (more on that later)
 No data on “adult expenditures” except for
expenditures on alcohol, tobacco, and adult
clothes
 Alcohol and tobacco self-reporting off, and
potentially odd
 Adult clothing cost about $1400 for
households with income of $65,000 (2 %).
 Slight errors in the report have big effect here
66
More on CES Data
 Estimators require data linking income,
expenditures, and family composition
 Only such data is the CES
 Data collected from panels interviewed every
three months
 Do panel members accurately report their
income and outlays?
 No
 Both Underreporting and over-reporting
67
Income Underreporting
 Problem well-known among economists
 Affects lower incomes especially

Lower half report expenditures in excess of
income
 PSI recognizes this but has no solution
 Likely effect: increase child outlay estimates
at lower income levels
68
Expenditure Underreporting
 Particular problems in higher incomes
 Indicator: implied savings rate implausible
 Households from $70 to $90,000 gross:
10,900
55,240
66,121
Average Net
Income
All Expenditures*
Implied Savings
*Expenditures include pension plan contributions
69
Expenditure underreporting, cont
 Likely Effect: lowers estimate of child
expenditures at upper income levels
 To 21 % of net income, from 38% at
lower income levels,
Conclusion: Data Problems


yield regressive child support schedule
Cast doubt on Rothbarth measures
70
Why the recent decline in Expenditure
Estimates at High Incomes?
 Change in parental values? Upper
income parents spending less on their
children?
 Costs of children’s goods gone up more
than the goods in general?
 Or an artifact of the data problems (E.g.,
increase in high income
underreporting?)
71
Summary
 Current guidelines have rapidly declining rates
 This rates structure produces problematic results
when parents have disparate incomes
 Seem inconsistent with likely goal of protecting
child well-being
 Seem wrong to Pima County respondents
 We get these rates arise from a method that
 Inexplicably assumes support should be based on
marginal expenditures in intact families
 Necessarily relies on problematic data to estimate
marginal rates
 Conclusion: we ought to use a different method
72
Summary, continued
 Our real task is not to estimate marginal
expenditures on children in intact families that
no longer exist or never existed
 It is rather to set support rates that properly
balance the competing policy concerns




Child well-being
Avoid gross disparities
Fairly allocate Support Burden Between
Parents
Avoid impoverishing obligor
73
Overview: Four Parts

What do our current guidelines really do?

A look at the numbers they produce

What should the guidelines do?
 Some possible principles
 What principles are favored by Arizona citizens
 How do they compare to current reality?
 Why do the current guidelines do what they do?
 Examining the theory of current guidelines, and
 why it necessarily produces these results
 What is the alternative?
 How could we do them differently?
74