University of Wisconsin–Madison

Child Support Policy Research Agreement, September 2005–December 2007

Under this research agreement between IRP and the Wisconsin Department of Workforce Development, there are 14 primary projects. Reports will be posted upon completion.

1. Court Record Data (CRD) Collection

IRP will collect a new cohort of paternity and divorce cases (Cohort 24), consisting of a random selection of cases petitioning for paternity establishment, the setting of child support or child placement in voluntary acknowledgment paternity cases, and divorce cases in the period from July 2003 through June 2004. IRP will also update, through 2006, all divorce and paternity cases in Cohort 21.

Through visits to counties, court record history data not currently recorded in the KIDS data system will be collected. The collected data will include information on legal custody and physical placement, visitation, and details concerning the specific provisions of each order (for example, cost of living adjustments, educational and asset trust funds, and child care and child physical placement provisions). Other information collected will include records of deviations from the use of the guidelines and information on returns to court for purposes relating to child placement, child support orders, revision or enforcement of child support, or referral for criminal proceedings for the nonpayment of child support.

The data collected will be merged with the KIDS database for information on payment history and arrearages. Additional information will be matched to these cases, including wage record information from Unemployment Insurance (UI) data, income information from the Wisconsin Department of Revenue, and W-2, Food Stamp, and Medicaid benefit information from CARES.

2. The Racine Debt Reduction Project, “Families Forward”

This project continues analysis of the pilot demonstration debt reduction experiment, Families Forward, currently underway in Racine County. The experimental evaluation of the program will involve at least two years of data collection from administrative data bases, including KIDS, CARES, and the UI system.

The project will examine administrative data to construct two key measures of the impact of the project: change in child support debt and change in child support payments. The project will also collect information from parents (both participants and nonparticipants) concerning their perceptions and understanding of the program. Beyond monetary impacts, it is expected that the program might have effects on family relationships and other dimensions of individual and family well-being.

Wisconsin is the first state to include CP-owed arrears in a debt reduction project, and is also conducting the experiment under rigorous experimental design standards. Researchers expect to be able to clearly identify impacts on child support payments and debt reduction, and on other program impacts and to make recommendations regarding ways to improve the program.

3. Review of Current Guidelines

A. Extent of Guidelines Compliance in New Orders

The review will focus particularly on comparing compliance before January 1, 2004, with compliance after that date, when new guidelines took effect, focusing on cases with sole placement (shared physical placement issues are discussed under Project 8). Three groups of such cases will be examined: those with low and high incomes that would be subject to a change in the guidelines, and those with mid-range incomes who would probably have been unaffected by the change in the guidelines.

Report: Ingrid E. Rothe, Jennifer L. Noyes, Lynn Wimer, and Anat Yom-Tov, The Compliance of New Wisconsin Child Support Orders with the Wisconsin Guideline: Pre- and Post-2004. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, July 2007.

B. Effect of New Guidelines on Payments of Orders

This research will analyze the impact of the child support guideline changes that went into effect January 1, 2004, on payment of child support orders established since that time. The research will build upon the analysis completed under 3A, above, comparing the actual support paid to the amount due, and will use KIDS and the UI Wage Record data to supplement income and earnings information available in the CRD data for cohorts 23 and 24.

Report: Ingrid E. Rothe, Steven T. Cook, and Anat Yom-Tov, How Did the 2004 Change in Wisconsin’s Guidelines Affect Child Support Payments? Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, January 2008.

4. Guidelines and Complicated Families

A. Review of Policies in Other States

This report will describe alternative policies used in other states concerning child support orders for complicated families, those in which one or both parents have had children with multiple partners. The information, collected through interviews with state officials, will be used in 4B, below, to analyze the implications of alternative policies through a simulation model that estimates the effect of current and potential alternative policies for families in Wisconsin.

Substantial divorce and remarriage and growing rates of nonmarital fertility have contributed to a higher incidence of multiple-partner fertility, which, especially among low-income families, is sufficiently common to warrant careful policy development and analysis.

Report: Emma Caspar, Review of Child Support Policies for Multiple Family Obligations: Five Case Studies. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, September 2006.

B. Wisconsin Simulation

This report will analyze the implications of alternative policies using a simulation model to estimate the effect of current and potential alternative policies for families in Wisconsin.

These two projects will together provide information on a range of policy options, advantages and disadvantages reported by states with experience implementing these policies, and estimates of the effects on families in Wisconsin.

Report: Maria Cancian and Daniel R. Meyer, Alternative Approaches to Child Support Policy in the Context of Multiple-Partner Fertility. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, December 2006.

5. Incarcerated Payers

A. Review of Policies in Other States

This report will document other states’ treatment of child support obligations of noncustodial parents while they are incarcerated and following their release. It will include a review of judicial decisions relevant to prevailing policy, given the role that the courts play in applying state child support guidelines, and of the intended and, to the extent possible, actual effects of current policy.

This report will help to inform the future direction of policy in Wisconsin by illuminating policies and practices already being pursued in other parts of the country and by demonstrating how these policies and practices can be designed to affect multiple outcomes.

Report: Jennifer L. Noyes, Review of Child Support Policies for Incarcerated Payers. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, December 2006.

B. Implementation of a Policy Change in Milwaukee County to Hold Orders in Abeyance

This report will provide the basis for an analysis of the effects of recent policy innovations in Wisconsin on postincarceration child support payment patterns. The analysis will attempt to identify the impact of suspending initial orders for support when a payer is incarcerated.

If incarcerated parents are unable to pay substantial child support, arrears may develop during their incarceration. These arrears may discourage employment in the formal sector and child support compliance. This report will provide the necessary implementation analysis and data collection to allow a later evaluation of the impact of a key policy option—holding orders in abeyance during incarceration.

6. Costs of Raising Children

This report will update previous papers that reviewed the literature on the cost of raising children, up to and including those costs associated with the transition to adulthood. As with any literature review, data included will depend on the extent to which research in this field has been reported.

The report will provide evidence on the state of research concerning the costs of children and intrafamily allocation of resources up through young adulthood, and can be used to help guide discussions of potential changes in Wisconsin’s guidelines. The review of expenditures during the transition to adulthood will provide context for the discussion of asset accounts and college savings in 3A.

Report: Ingrid Rothe and Lawrence M. Berger, Estimating the Costs of Children: Theoretical Considerations Related to Transitions to Adulthood and the Valuation of Parental Time for Developing Child Support Guidelines. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, April 2007.

7. Health Orders: Implementation and Data Reports on New Procedures

In October 2005, Wisconsin Bureau of Child Support began a new procedure of matching monthly enrollment tapes from health insurance companies licensed in Wisconsin with parents and children in KIDS. If a parent has health insurance that could cover a noncustodial child but does not do so, the employer will be required to add the child to the parent’s policy, so long as the cost of that does not exceed 5 percent of the parent’s gross monthly earnings from that employer. The noncustodial parent and custodial parent will each be notified and given a chance to appeal the order. IRP will undertake an implementation report that should provide useful material on the goals that were sought, difficulties that had to be overcome, etc.

A second report will provide descriptive data on the number of children added to the health insurance policies of noncustodial parents and how many of those children had previously been on Medicaid. An estimate of Medicaid savings and increased insurance coverage as a result of this process should provide useful context.

8. Use of Shared Physical Placement Guidelines in Divorce Cases

IRP will analyze the effects of the January 2004 change in Wisconsin child support guidelines for shared physical placement cases.

Three main topics will be addressed:

  • How often and accurately are the new shared placement guidelines being used?
  • What are the changes in the percentage of shared placement cases, and to what extent are any changes consistent with changes in the financial incentives created by the new guidelines?
  • Are there changes in litigation between parents and are any changes consistent with changes in the financial incentives created by the new guidelines?

From 1995 through 2003 shared placement cases in Wisconsin were subject to a unique child support guideline and were characterized by high rates of equal shared placement and low rates of child support orders. On January 1, 2004, the child support guideline was changed, such that child support orders would be increased in equal shared placement cases and substantially lowered in unequal shared placement cases. Examination of divorce cases in Cohort 23 (before the change) and Cohort 24 (after the change) will give the first indication of whether and how well the new child support guidelines are being adopted and might indicate whether a change in child support guidelines substantially affects parental decision-making and behavior during a divorce.

Report: Patricia Brown and Maria Cancian, Wisconsin’s 2004 Shared-Physical-Placement Guidelines: Their Use and Implications in Divorce Cases. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, March 2007.

9. Use of Child Care Benefits by Parents with High Child Support Receipts

This report will assess the extent to which families receiving child care benefits would be disqualified were child support income considered in calculating eligibility and benefit levels in the Wisconsin Shares program. The report will:

  • Examine income levels of Wisconsin Shares participants from March 2000 through 2005. (March 2000 coincided with a change in the policies related to financial eligibility for child care benefits in Wisconsin).
  • Compare income levels of Wisconsin Shares participants if child and family support income were included in the income calculation and compare the actual caseload with the potential caseload if child and family support were not disregarded.

Discuss the characteristics of cases that would no longer be eligible for child care subsidies if child and family support income were not disregarded.

These analyses will use data from the CARES data system, matched with the KIDS child support data system. The study should help explain the extent to which making a change in the child support disregard policy for child care subsidies would affect eligibility for those subsidies.

Report: Emma Caspar and Steven T. Cook, Eligibility for Child Care Subsidies of Parents with Child Support Income. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, November 2006.

Report: Steven T. Cook, Child Support Income and Copayments in the Wisconsin Shares Child Care Subsidy Program. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, March 2007.

10. Orders and Payments over Long Periods

An earlier report examining the potential impact of COLAs included preliminary calculations of what happened to child support orders in the four years after they were initially established. That analysis suggested that orders change very little for a high proportion of initially mid-range income payers, while incomes continued to rise. This report will extend that analysis to follow up orders over a period of 7–8 years after an initial order was established.

Among other investigations, researchers will analyze payments over the period and examine how orders and payments age over time in comparison to the Consumer Price Index. The analyses for this research will use administrative data from the CRD, KIDS, and the UI Wage Record.

Concern has been raised that, as orders age, their relationship to the state’s guidelines or to the needs of the child and the resources of the parents become more attenuated. This report will quantify the extent to which orders are modified over time and whether orders and payments keep pace with increases in the Consumer Price Index.

11. Review of Shared Placement Guidelines in Other States

In this report IRP will examine the most current child support guidelines used in other states in shared placement cases. This study will include time-share threshold levels for defining shared placement, formulas used to calculate child support, factors used in those formulas, and the consideration of “variable costs” such as medical, educational, and child care expenses.

Eight to ten of the more common or most promising formulas will then be applied to a variety of common and uncommon parental income and time-share situations to compare their effect on equity issues: for example, which parent is the child support obligor, what is the level of child support obligation, and whether “cliff effects” in the formula outcomes would provide incentives for parents to litigate or would generate substantial financial inequities among obligors.

Trends in the last decade have been toward legislation favoring shared physical placement, and the American Law Institute has proposed a custody rule supporting shared placement. It is an appropriate time, therefore, to investigate guidelines that other states are developing in response to the fact that shared custody arrangements are becoming much more common nationally.

Report: Patricia Brown and Tonya Brito, Characteristics of Shared-Placement Child Support Formulas Used in the Fifty States. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, March 2007.

12. Voluntary Paternity Acknowledgment Update

IRP will update a 2003 report on the implications of voluntary paternity acknowledgment for children born in calendar years 2000 and 2001. Researchers will examine the longer-term implications of voluntary paternity establishment on child support orders, child support payments, and financial security of children over a 5–7-year period, comparing voluntary acknowledgment with adjudicated cases. They will also compare longer-term physical placement outcomes for voluntary and nonvoluntary paternity children. The primary data sources for this report will be KIDS, and information from the three most recent CRD cohorts. These cases will be merged with CARES for receipt of government assistance, and UI wage record data for parental employment and income information.

Voluntary paternity acknowledgement has been advocated as a means of promoting paternal involvement in the lives of nonmarital children, both for their children’s financial security and for other social benefits. These analyses will allow us to estimate, in the longer term, the degree to which voluntary paternity acknowledgment has led to greater compliance with child support orders and greater participation in children’s lives as they age, through physical placement arrangements.

Report: Patricia R. Brown and Steven T. Cook, A Decade of Voluntary Paternity Acknowledgment in Wisconsin: 1997–2007. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, May 2008. [PowerPoint Presentation]

13. Stability of Child Support Orders, Payments, and Receipts

A. Stability of Orders as Noncustodial Parent Income Changes

This report will examine changes in earnings in a recent cohort of noncustodial fathers, focusing on the extent to which orders and payments change when earnings change. The analysis provides the basis for the companion analysis of the impact of changes in noncustodial fathers’ orders and payments on the stability of custodial mothers’ incomes (in Project 13B). The report includes couples who had their first child support order in 2000 and examine patterns over the next 4 years.

Report: Yoonsook Ha, Daniel R. Meyer, and Maria Cancian, The Stability of Child Support Orders. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, December 2006.

B. Stability of Custodial Parent Income as Orders/Payments Change

This project focuses on the custodial mothers who were partnered with the fathers examined in Project 13A. The project will analyze the extent to which the order and payment changes (or lack of changes) documented in the first part result in more or less instability of income for the mother.

Stable child support orders and payments may be particularly valuable for custodial parent families. However, stable obligations in the face of substantial income changes may undercut the goal that noncustodial parents share a stable proportion of their resources, since stable orders may leave some noncustodial parents paying substantially more or less than what would be expected given current income.

Report: Yoonsook Ha, Maria Cancian, and Daniel R. Meyer, The Regularity of Child Support and Its Contribution to the Regularity of Income. Report to the Wisconsin Department of Workforce Development, Bureau of Child Support. Institute for Research on Poverty, University of Wisconsin–Madison, April 2007.

14. Child Support and Food Insecurity/Hunger

Research consistently finds that food insecurity is higher among single-mother households compared to other household types, even after controlling for income and other risk factors. In Wisconsin, the rate of food insecurity (measured by standard survey questions) among single-mother households is 33 percent, compared to 7 percent among married couples with children. This research will examine whether child support reduces the risk of food insecurity and hunger among single-mother families. The report will use national data from the Current Population Survey and/or the National Survey of America’s Families. Both sources include measures of food security status as well as child support receipts.

This research will contribute to our understanding of the benefits to single-mother households that arise when the child support system is effective in transferring larger amounts of support. Although considerable attention has been paid to the impact of child support on income and poverty, its impact on food insecurity and other forms of material hardship is not well understood.