Recent research on child support issues has been concerned with normative problems involvingthe distribution of welfare between divorced parents and their children as well as with the assess-ment of the behavioral responses of parents to child support orders and custody arrangements( see, e.g., Del Boca and Flinn (1995), GarÞnkel and Klawitter (1990), Bartfeldt and GarÞnkel(1996), Del Boca (1996), Del Boca and Ribero (1998), and Flinn (2000)). While there is bynow an extensive literature analyzing the effects of child support policies on monetary transfersof noncustodial parents and the extent of compliance with child support orders, little researchhas been done on the relationship between monetary transfers between parents and the divisionof the child™s time. While income transfers to the custodial parent are no doubt importantfor the child™s consumption and general well-being, there exists considerable empirical evidencesuggesting that the division of the child™s time between the parents has important e ffects on thechild™s welfare ( Beller and Graham (1993)).There have been few analyses of this relationship.Weiss and Willis (1985) provide one theoretical motivation for the positive relationship betweenthe noncustodial parent™s contact time with the child and their level of transfers. They claimthat increased contact time allows better monitoring of the custodial parent™s expenditures onthe child, which induces higher levels of transfers to the custodial parent.We have developed a model (Del Boca and Ribero ( 1999)) in which visitations and childsupport are the outcomes of a negotiation process whereby the father exchanges income forvisitation time. Institutional agents, such as judges, state legislatures, etc, can impact thewelfareofthemembersofthenonintactfamilybyalteringtheendowmentsofeachofthe1

We provide a framework within which the child-support compliance decisions of noncustodial fathers and the child-support awards set by institutional agents can be coherently interpreted. The model of child-support transfers is able to capture qualitatively the features of the monthly payment distribution. Estimated parental-decision rules are used to infer the implicit weights given by institutional agents to the postdivorce welfare of parents and children. We find that the weight attached to the combined welfare of the custodial mother and child is significantly less than the weight given to the father's welfare in most sample cases.

While a large literature has focused on the impact of parental investments on child cognitive development, very little is known about the role of the child’s own investments alongside that of the parents. By using the Child Development Supplement of the Panel Study of Income Dynamics, we model the cognitive production function for adolescents using an augmented value-added model and adopt an estimation method that takes account of unobserved child characteristics. We find that a child’s own investments made during adolescence matter more than the mother’s. Our empirical results appear to be robust to several sensitivity checks.

We construct a dynamic model of child development where forward-looking parents and children jointly take actions to increase the child’s cognitive and noncognitive skills within a Markov perfect equilibrium framework. In addition to time and money investments in their child, parents also choose whether to use explicit incentives to increase the child’s self-investment, which may reduce the child’s future intrinsic motivation to invest by reducing the child’s discount factor. We use the estimated model parameters to show that the use of extrinsic motivation has large costs in terms of the child’s future incentives to invest in themselves.