Linking Family Change, Parents' Employment and Income and Children's Economic Well-Being:  A Longitudinal Perspective


The relationship between family change and income is not unidirectional. In less direct ways, income also has an effect on family transitions, playing a role in the decision to separate or to form a new conjugal union. The stress of financial hardship, for instance, may contribute to the demise of a conjugal union. At the same time, the threat of even greater financial hardship may be a powerful inhibitor to separation, although it may have a different effect on low-income families than on those who are better off financially. A subject that has received little attention so far, probably because of the dearth of information about it, is whether intact family characteristics, such as the level of income and the way parents organize their work schedules, influence how separating parents divide responsibilities for children. Longitudinal data from consecutive cycles make it possible for the first time to relate post-separation arrangements to characteristics of the family and parents prior to separation, information not available for those who were already separated at Cycle 1. This is the subject of this part of the report: the impact of pre-separation family income and employment schedules on the type of custody arrangements, and the level of contact and child support payments established by couples separating between Cycles 1 and 2.

Findings in the previous section suggest that pre-separation family income may be related to whether children live with their mother or father after parental separation. It is also possible that the parents' employment, particularly that of mothers, influences decisions made about living arrangements and child support when the parents separate. With data collected both before and after separation, it is possible to address these questions directly and gain new insight into the relationship between economic factors and adapting to family change. The following analysis is based on approximately 500 children whose parents separated between Cycles 1 and 2 of the NLSCY and who were still living apart at the time of Cycle 2.

3.1 Pre-separation factors, custody and contact

Looking at children whose parents separated between the two cycles provides interesting insight into living arrangements and father-child contact during the period immediately following the separation. That fathers remain closely involved with their children in the first year or two is apparent (see Figure 7). At the time of Cycle 2, almost a quarter of children were living full time (10 percent) or part time (14 percent) with their fathers; and more than half saw them at least once a week (36 percent) or once every two weeks (15 percent). Of the rest, most had irregular contact (17 percent) and only 8 percent no longer had any contact with their father.

Figure 7 - Type and frequency of contact with father in 1996-97 for children whose parents separated between Cycles 1 and 2, NLSCY

Pre-separation family income and custody arrangements

Figure 8 relates children's living arrangements after parental separation (whether living with their mother, father or in shared custody) to the family's income before the parents separated.[5] The distributions suggest that pre-separation family income is linked to the type of custody arrangement adopted by separating parents. The relationship is particularly clear in the case of shared custody, with proportions rising steadily as family income rises. Children in families with an annual income greater than $60,000 are four times (25 percent) as likely to share time between both parents than are children in families with an annual income of less than $20,000 (6 percent). Shared custody appears to be an increasingly common arrangement among separating parents with the financial means to support two family homes. The link between father custody and income is less clear, however. Although children in families with an income of $60,000 or more are twice as likely to live with their father than other children, below this level, there is little variation in the proportions (7 percent and 8 percent). Nonetheless, it is clear that the higher the family's income before parental separation, the more likely children are to go on living at least part of the time under the same roof as their father.

Figure 8 - Living arrangements at Cycle 2, for children whose parents separated between Cycles 1 and 2, according to the household income before separation, NLSCY, 1994-94 and 1996-97

Pre-separation family income and contact with non-resident fathers

Another question, related to this, concerns the frequency of contact that non-resident fathers have with their children. Does family income before separation affect the amount of time fathers spend with children who live with their mother after separation? If the payment of child support is linked both to a father's ability to pay and to the frequency of contact he has with his children, we would expect non-resident fathers from higher income families to stay more closely involved with their children after the separation than fathers from lower income families. However, the findings presented in Figure 9 support this hypothesis only with regard to the father actually losing contact with the children: almost one in five non-resident fathers (19 percent) from the lowest income families compared to only 3 percent of non-resident fathers from high-income families lost contact with their children within the relatively short period between the separation and the survey. Beyond this, the association is less clear. Non-resident fathers at both extremes of the income scale, for instance, are virtually indistinguishable in terms of the proportions remaining closely involved with their children; approximately half the children in these groups see their father at least once a week. Clearly, income alone cannot explain variations in the level of contact that non-resident fathers maintain with their children.

Figure 9 - Level of contact with non-resident father of children living with their mother at Cycle 2, among children whose parents separated between Cycles 1 and 2, according to the household income before separation, NLSCY, 1994-95 and 1996-97

Women's employment and custody arrangements

The connection between family income before parental separation and children's living arrangements afterwards is not necessarily a causal one, however. We have seen that families with higher incomes are also families in which both parents are employed. In families with mothers who work, fathers tend to be more involved in caring for their children; they may be more competent parents, with more confidence in their ability to look after their children, and they may more likely wish to have their children living with them after separating from their spouse. For their part, working mothers may also be more willing to continue sharing the everyday responsibilities for children with fathers after the separation. The information in Table 7 supports this hypothesis.

  • Shared living arrangements are most commonly chosen by parents who both had paid employment, full-time or part-time, before separation. About 20 percent of children with both parents in the labour force were alternating between parents' homes, compared to less than 6 percent of those with only one or neither parent employed.
  • Children in single-earner intact families are much more likely than other children to be living with their fathers after their parents' separation. One fifth of these children (20 percent) were living with their father at the time of Cycle 2, compared to less than 8 percent of children with parents in other types of work-sharing patterns.
  • The chances are very high that children remain with their mother (89 percent) when neither parent had full-time employment before the separation.

In other words, it is possible that the apparent association between income and custody arrangements is due to this relationship between women's employment and custody arrangements, in the sense that family income is higher when mothers also contribute to the household income. To get a better understanding of how these two factors are related to decisions about children's living arrangements when the parents separate, we conducted a multinomial logistic regression analysis, controlling for a number of other elements measured in Cycle 1 that are likely to influence custody arrangements. Concretely, we wished to test how income, mother's work and other potentially important variables influence whether children live in shared custody or with their father, rather than remaining with their mother as is most often the case. The other variables in the analysis included the parents' level of education, the mother's employment status, the type of union into which the child was born, whether or not the parents had children from an earlier union, the number of children in the household, the age of the parents and children at separation, the child's sex, and the region (Quebec versus the rest of Canada).

The regression analysis confirmed the significant role played by both income and the mother's employment in the choice of custody arrangement, even when the effect of other characteristics are taken into account.[6] The higher the income, the more likely children are to be living with their father or in shared custody. However, beyond this similarity, a very different picture emerges of the circumstances favouring shared rather than the father's sole custody (compared to living with the mother). First, income seems to play a more direct role in shared custody, which is to be expected given the need for two family homes. The mother's employment also is crucial, with shared custody significantly more likely among women who were in the labour force before the separation. All in all, the profile of separating couples choosing shared living arrangements for their children is one of relatively well-off couples, with older, educated fathers and working mothers—couples who may well have relative “equality” of gender roles in the family. This profile is also more common in Quebec, and in families with no more than two non-infant children.

Table 7
Living arrangements for children whose parents separated between Cycle 1 and 2, according to the parents' pre-separation labour force participation, NLSCY, 1994-95 and 1996-97

Employment situation
before separation
Child's living arrangements in 1996-97
With mother Shared living arrangements With father
Both parents, full time 75.3 19.8 4.9
1 full time / 1 part time 72.7 20.0 7.3
1 full time 74.2 5.8 20.0
Neither full time 89.0 5.5 5.5
TOTAL 76.5 14.2 9.3

Employment situation before separation (1994-95) Total N
Both parents, full time 100.0 182
1 full time / 1 part time 100.0 110
1 full time 100.0 120
Neither full time 100.0 73
TOTAL 100.0 485

The context encouraging the relatively uncommon arrangement in which children live with their father after separation appears to be rather different, and more influenced by mother-related factors. The multivariate analysis confirms the importance of the mother's labour force status, with fathers far more likely to keep children with them after separation if the mother was not employed, and especially if she had not completed high school. The number of children is also important, with children in two-child families more likely to remain with their father than single children or those with more than one sibling.

3.2 Pre-separation factors and Child support

Many factors influence the payment of child support, but one might expect a close association with two factors central to this report: whether the non-resident parent can afford to pay, and how financially dependent the custodial parent is on the child support payments. The ability to support two households rather than one depends largely on the level of pre-separation family income; for example, non-resident parents without the means to keep a roof over their heads are hardly in a position to pay child support. The financial dependence of the custodial parent, on the other hand, is determined largely by how parents organized income-earning; mothers who were fully integrated in the labour force before separation and who continue to work afterwards, for example, are less dependent on child support payments than are mothers who were not.

Reaching a child support agreement

The distribution of children whose parents separated between the two cycles, according to whether or not parents had a child support agreement or whether an agreement was in progress, is shown in Figure 10. It lends support to the hypothesis that the higher the family income prior to separation, the more likely separating parents are to reach a support agreement. In 1996-97, nearly half of the lowest income families (49 percent) had no agreement; this proportion decreases with each income increment, to the extent that slightly more than one fifth (21 percent) of the highest income category families were without a support agreement, despite the relatively short period since the separation. Another interesting feature of these figures is the proportion of highest income families with an agreement in progress at the time of Cycle 2: 17 percent, far higher than in the other categories. Do wealthier families take more time than others to reach an agreement? It is possible that they not only have more financial issues to resolve, but that they are also less pressured to settle matters rapidly. We have seen, for instance, that high pre-separation family income generally depends on mothers' full-time employment. At separation, therefore, reaching a support agreement may be a matter of less urgency for working mothers for whom child support income represents a smaller proportion of total income than it does for women without paid employment.

Figure 10 - Child support arrangements by 1996-97 for children whose parents separated between Cycles 1 and 2, according to the household income before separation, NLSCY, 1994-95 and 1996-97

Paying child support

Having a support agreement does not necessarily mean that money changes households. At times, payments may not be made because of the nature of custody arrangements. For instance, while a child support agreement exists for more than three quarters of children in shared custody, the agreement may not entail money passing from one parent's household to the other. In the following analysis of the link between income and the regularity of child support payments, therefore, only children living with their mother have been included in the distributions shown in Table 8. For each pre-separation income category, proportions are given for those whose parents have no agreement, have an agreement in progress, or have reached an agreement on the payments to be made by non-resident fathers. Those with a support agreement are further subdivided according to whether payments are made regularly (if late at times), or irregularly or not at all.

Table 8
Child support agreement and payments for children whose parents separated between Cycles 1 and 2, and who were living with their mother at Cycle 2, according to the family income before separation, NLSCY, 1994-95, 1996-97

Child support agreement Family income before separation
Less than $20,000 $20,000-$39,999
No agreement 47.2 37.8
Agreement in progress 6.9 4.4
Agreement 45.9 57.8
regular payments 15.3 36.3
irregular or absent payments 30.6 21.5
Total 100.0 100.0
N 72 135

Child support agreement Family income before separation Total
or more
No agreement 21.7 21.5 32.1
Agreement in progress 6.0 24.7 10.2
Agreement 73.3 53.8 57.7
regular payments 55.4 49.5 39.7
irregular or absent payments 16.9 4.3 18.0
Total 100.0 100.0 100.0
N 83 93 383

These distributions emphasize the close link between income and support payments. Not only are support agreements more common in higher income families, payments are also more reliable. Payments are irregular or absent for just 4 percent of children in the highest income families compared to more than 30 percent of those in the lowest income category. In fact, among the lowest income separating families, not only was an agreement reached for fewer than half (46 percent) of the children who remained with their mother, in only one third of such cases was the agreement adhered to. Overall, regular child support was received for only 15 percent of these children. Evidently, supporting two households on an income that previously supported one entails many financial adjustments in the best of circumstances; in situations in which the family income is barely sufficient to support one household, a transfer of resources from one household to the other is simply not possible.

3.3 Summary

The question explored in this section is whether “intact” family characteristics, such as the level of income and the way parents organize their work schedules, influence the way separating parents divide responsibilities for children. The answer appears to be in the affirmative, for both intact family incomes and parents' labour force participation. On average, fathers from affluent intact families remain more closely involved in their children's daily lives than those from less well-off families, in the sense that they more often have sole or shared custody of their children. The relationship between income and shared custody is particularly clear, and to be expected given the need to support two households. Beyond this, however, other influences are at work. While many fathers from low-income families have frequent contact with their children, having insufficient means to pay child support means that a certain proportion of these fathers lose contact with their children fairly quickly after the separation—something that rarely happens among fathers in higher income families. In families with both parents employed, fathers are more likely to have been involved in the daily care of their children, and may more easily envisage caring for their children alone after separating from their wife. Moreover, working mothers may also be more willing to share custody with fathers who had been actively involved in raising the children before separation. These are among the factors that undoubtedly influence the decisions made by separating parents about custody and child support. However, as the following section shows, regardless of whatever couples may agree upon in the period following separation, for many children the arrangements change as the circumstances of mothers, fathers and the children evolve.

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