Parental responses to child support obligations

We leverage non-linearities in Danish child support guidelines together with rich administrative data to provide causal estimates of parental behavioral responses to child support obligations. We estimate that among families with formal child support agreements, a 1, 000 DKK ($183) increase in a father’s annual obligation is associated with a 573 DKK ($104) increase in his annual payment. However, we also show that an increase in the obligation reduces the likelihood that the father lives with his child, pointing to some substitution between financial and non-pecuniary investments. Further, we find that larger obligations are associated with higher new-partner fertility among both parents. The maternal fertility response is consistent with a positive income-fertility relationship, while the paternal fertility response may reflect increased demand for new offspring as a result of reduced contact with existing children. Finally, we find evidence that some fathers reduce their labor supply to avoid facing higher support obligations. Our findings suggest that government efforts to increase child investments through mandates on parents can be complicated by their behavioral responses to them.