Laws governing child support obligations for separated parents reflect and shape the normative understanding of “cost of raising children” – the conditions and resources required to raise children. Yet the actual calculations of these costs have been seen as a technical issue, with little normative content, and relegated to economic experts. This work shows how neo-classical economic models used in many legal systems underestimates the “cost of raising a child” and propose an alternative ‘holistic’ model founded in the recognition of care and dignified living 

Child support laws and their evolution in Israel

Changes in gender norms and the rise of the ‘dual-earner’ (or ‘dual-carer’) family have led to on-going changes in divorce, custody and child support laws around the world. Child support is the financial obligations of separated parents in which one parent (historically the father) is obligated to pay cash to the custodial parent (historically the mother) to share the costs of raising their children. This is the case in Israel where child support rulings are governed by personal religious law, and both Jewish or Islamic place primary and central obligation to pay child support on the father.  Starting in the 1980’s, Israeli civil courts became less comfortable applying this default, particularly in cases of joint custody, and they began to engage in a piecemeal “adaptation” of religious norms to the principles of gender equality, as these are perceived by the civil court system.

Against this background, and with the desire to unify child support laws in Israel under territorial civil law and to determine the contribution of each parent, the “Committee for Examining the Issue of Child Support in Israel” was established in 2006 by the Ministry of Justice. The Committee determined that a uniform territorial civil law should be established whereby the responsibility and duty to financially support the child will be equally imposed on both parents, according to each parent’s financial ability (their  relative share of joint income) and considering the duration of time the child spends with each parent as determined by the custody arrangement.  Following examples from Australia, UK and several US states, the committee proposed that the total amount of support a child is ‘entitled to’ should be determined by a universal table reflecting the amount of financial support a child needs, given parents’ joint income and number of children. A model for the calculation of this statistical table was proposed by economist and committee member Rueben Gronau was attached to the committee’s report. The estimation model identifies the “cost of raising children” as the marginal expenditureon children—the differences in expenditure between households with two adults and no children and households with two adults and a child (or more), conditional on the adults in each household having the same standard of living.

The Marginal Expenditure model and its implications

Estimates of the cost of living for adults is based on observed expenditure levels of single-person households, but children are rarely (if at all) observed separately from adults. This situation is not coincidental, of course, as children are dependent on adults to care and provide for them. This implies that the identification of the cost of raising a child cannot be directly observed and requires an estimation model. The marginal cost model defines the cost of raising children as costs associated exclusively with children, meaning costs that would not exist if it were not for the children. In this model, the production cost of the additional unit is “marginal” because it measures the cost of the last unit (the child), net of fixed costs associated with the already existing unit (the parent).  Normatively, the marginal model reflects the “individualistic family” idea—family as a contractual relation between independent individuals. Thus, the cost of raising children can be estimated in relation to the child alone, separately from the cost of living of parents.  However, the normative underpinnings of this (neo-classical) view of the family do not necessarily hold in the context of families and children: 

• First, the marginal method assumes separability between individuals within the household, ignoring the inherent interdependency between children and their parents. 
• Second, the use of focus on traded goods and services (expenditure) to reflect costs disregards unpaid care work, perhaps the most important input in raising children
• Third, fixed costs such as housing, are assumed to given by the mere existence of parents and are not part of the cost of raising children, while in practice, divorce in itself leads to replacing one household with two.

The Dignified Living Model

We propose an alternative conceptual framework for the determination of child support, rooted in holistic view of the family as a communal space.  This approach centres care and interdependency, by recognizing that children’s well-being, and specifically material well being, cannot be separated from those of the parents, and therefore child support should be determined to ensure the standard of living of the household, rather than the child alone. Therefore, the “cost of raising children” is identified as the level of income that guarantees dignified living standards for children with their parents, given the resources available to the family. Rather than attempting to directly measure or price care, the model accounts for unpaid care work by directly including the standard of living of the carers (parents) in the overall cost. 

A household’s “Dignified Living Standard” is calculated using an extension of the Food Energy Intake (FEI) model developed by economist Martin Ravallion. It is anchored in a normative definition of a food basket for each individual in the household and uses the sum of these baskets to identify the level of non-food consumption that ensures food security. The sum of the two is the income level that guarantees dignified living for the household. To determine child support, the dignified living income level is calculated for each household to which the children belong to after divorce, where the ‘size’ of each household is determined by the custody arrangement. Then obligations are determined to bridge gaps between the self-income of each of the households to which the children belong and the income required to ensure a dignified living standard.

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