Divorce , Remarriage and Child Support ∗

Modern marriage markets display increasing turnover, with less marriage but more divorce and remarriage. As a consequence, a large number of children live in single parent and step parent households. There is substantial evidence that children of divorced parents do not perform as well as comparable children in intact families. However, there is also some evidence that this gap declines with the aggregate divorce rate. We develop a model in which the higher expectations for remarriage associated with higher divorce rates can trigger an equilibrium in which divorced fathers make more generous transfers that benefit their children and the mother in the aftermath of divorce. As a result, the welfare loss of children from the separation of their parents can be lower when divorce and remarriage rates rise.