I am not a lawyer and this is not legal advice. Use a lawyer and economics
expert for your case or lobbying.
The Income Shares formula is used by 33 states. Last week, we saw how it
immediately detaches from reality by denying divorce occurred, which has the
effect of shifting all its financial burden onto only one party. There's more.
For Income Shares, the parents' incomes are added and used to step into a
table of child costs for that income level. That amount is split between the
parents according to their share of the combined income (according to ability
to pay).
Sounds pretty reasonable. But that table of child costs comes from the
Betson-Rothbarth estimator of child costs. It is an income equivalency model with no
actual costs component, that indirectly derives a theoretical amount for what
families spend on children.
Economists use indirect measures when there is no direct data, to develop and
test hypothesis. Estimators, such as Betson-Rothbarth, provide rough estimates
only arguably appropriate as an academic convenience for the theoretical work
in which it is used. For instance, when studying low income families they may
be necessary if less direct data is available. But few economists would
suggest their practical application in real-life without thorough field
study, comparison of its outcomes with other measures, and adaptation.
That has not been done.
When you change the purpose of a measure, you have to change the measure.
The Betson-Rothbarth estimator measures family spending on only three adult
goods: tobacco, alcohol, and adult clothing. When you compare the spending on
them between childless couples and couples with one child, the difference is
taken to be the cost of one child.
One can see why it greatly over-states child costs for most families It might
have some merit for comparing between a two- and three-child family, or at low
income levels, but it over-states child costs in general because, when you
have children, your spending on these items declines, not only because of
transferring money to expenses for the child. Spending on these items greatly
declines because your interests dramatically change, you don't have the time,
because of moral pressure from friends and family, and a shift in saving
needs. Many behaviors change with the coming of children, few financially
motivated.
There are a host of reasons why this academic convenience is inappropriate for
general use. And any responsible economist will say so.
Possibly the most disturbing problem with generally using an indirect
estimator for child costs is that it is unnecessary. We've had decades of
governments gathering actual family costs, and other areas of economics
studying family spending. None has been applied.
For other reasons, branches of the federal government have collected the
actual costs of families for decades, so how much different sized families
spend on each of housing, clothing, education, medical care, transportation,
and food, is thoroughly documented, some, by region.
There can be a trick to interpreting even these numbers. They may give the
per capita cost of, say, housing when the marginal cost should be used for our
purposes. That is, a couple only needs a one-bedroom apartment at $500 a
month, but with a child they need a two-bedroom apartment at $600 a month.
Is the child's share of the housing cost the per capita $200, or the marginal
increase of $100?
Copyright © 2004 K.C.Wilson.
K.C. Wilson is the author of
Male Nurturing, The Multiple Scandals of Child Support, and other e-books
on family and men's issues.
