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Female Earnings and Divorce Rates: Some Australian Evidence

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  • Bruce Phillips
  • William Griffiths

Abstract

The purpose of this article is to examine whether female earnings have influenced divorce rates in Australia, using state-level data for the past four decades. Following a recent study by Ressler and Waters (2000), which concludes from comparable US data that female earnings and divorce rates may be jointly endogenous, initial testing is performed to identify whether female earnings can be treated as exogenous. A Hausman specification error test finds no evidence of a simultaneous relationship in the Australian data, in contrast to the findings of Ressler and Waters. The test result supports the hypothesis that other underlying factors affect female earnings, of which higher divorce rates are merely another symptom. A divorce rate equation is estimated. In accordance with much of the literature, the rise in female earnings over the past four decades is found to have increased Australian divorce rates. Copyright 2004 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research.

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Bibliographic Info

Article provided by The University of Melbourne, Melbourne Institute of Applied Economic and Social Research in its journal The Australian Economic Review.

Volume (Year): 37 (2004)
Issue (Month): 2 (06)
Pages: 139-152

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Handle: RePEc:bla:ausecr:v:37:y:2004:i:2:p:139-152

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  1. Allen, Douglas W, 1992. "Marriage and Divorce: Comment," American Economic Review, American Economic Association, vol. 82(3), pages 679-85, June.
  2. Rand Ressler & Melissa Waters, 2000. "Female earnings and the divorce rate: a simultaneous equations model," Applied Economics, Taylor & Francis Journals, vol. 32(14), pages 1889-1898.
  3. Sander, William, 1985. "Women, Work, and Divorce," American Economic Review, American Economic Association, vol. 75(3), pages 519-23, June.
  4. Smith, Ian, 1997. "Explaining the Growth of Divorce in Great Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(5), pages 519-44, November.
  5. Johnson, William R & Skinner, Jonathan, 1986. "Labor Supply and Marital Separation," American Economic Review, American Economic Association, vol. 76(3), pages 455-69, June.
  6. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-87, December.
  7. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
  8. Peters, H Elizabeth, 1986. "Marriage and Divorce: Informational Constraints and Private Contracting," American Economic Review, American Economic Association, vol. 76(3), pages 437-54, June.
  9. Peters, H Elizabeth, 1992. "Marriage and Divorce: Reply," American Economic Review, American Economic Association, vol. 82(3), pages 687-93, June.
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