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The Importance of Financial Considerations in Divorce Decisions

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  • Peters, H Elizabeth

Abstract

This paper studies the linkage between the expected financial consequences of divorce and the decision to become divorced. A standard choice-theoretic model predicts that the probability of divorce will be negatively related to the financial opportunity cost of divorce. This opportunity cost is measured as the difference in the present values of the future income streams that a married woman might expect if she were to stay married rather than become divorced. The author's empirical results indicate that the expected short-term financial consequences are a better predictor of subsequent divorce than are the longer-term consequences. Copyright 1993 by Oxford University Press.

Suggested Citation

  • Peters, H Elizabeth, 1993. "The Importance of Financial Considerations in Divorce Decisions," Economic Inquiry, Western Economic Association International, vol. 31(1), pages 71-86, January.
    • Handle: RePEc:oup:ecinqu:v:31:y:1993:i:1:p:71-86
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    Cited by:

    1. Robert Nakosteen & Michael Zimmer, 2017. "Marriage dissolution among American men, 2003–2010: The roles of measured earnings and latent selection," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1348327-134, January.
    2. Tu, Le Minh & Jirjahn, Uwe & Linh, Dinh Hong & Dung, Nguyen Dac & Kingsbury, Aaron, 2018. "The impact of unemployment on the resiliency of couples:A case study of Germany," Economic Analysis and Policy, Elsevier, vol. 60(C), pages 62-68.
    3. Ian Walker & Yu Zhu, 2004. "Child Support and Partnership Dissolution: Evidence from the UK," Studies in Economics 0408, School of Economics, University of Kent.
    4. Ian Walker & Yu Zhu, 2004. "Child support liability and partnership dissolution," IFS Working Papers W04/18, Institute for Fiscal Studies.
    5. Aloysius Siow, 1998. "Differential Fecundity, Markets, and Gender Roles," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 334-354, April.
    6. Ian Smith, 2003. "The Law and Economics of Marriage Contracts," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 201-226, April.
    7. Kerwin Kofi Charles & Melvin Stephens, 2004. "Job Displacement, Disability, and Divorce," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 489-522, April.
    8. Anne-Rigt Poortman & Matthijs Kalmijn, 2002. "Women's Labour Market Position and Divorce in the Netherlands: Evaluating Economic Interpretations of the Work Effect," European Journal of Population, Springer;European Association for Population Studies, vol. 18(2), pages 175-202, June.

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