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Marriage and divorce: the role of unemployment insurance

Author

Listed:
  • Bastian Schulz

    (Aarhus University, the Dale T. Mortensen Centre, ifo Institute, IZA, CESifo)

  • Fabian Siuda

    (Vienna University of Economics and Business, ifo Institute)

Abstract

This paper examines how changes in household-level risk sharing affect the marriage market. We use as our laboratory a German unemployment insurance (UI) reform that tightened means-testing based on the partner’s income. The reduced generosity of UI increased the demand for household-level risk sharing, which lowered the attractiveness of individuals exposed to unemployment risk. Because unemployment risk correlates with non-German nationality, our main finding is that the UI reform led to a decrease in intermarriage. The 2004 expansion of the European Union had a comparable effect on intermarriage for the affected nationalities. Both reforms increased marital stability, which is consistent with better selection by couples.

Suggested Citation

  • Bastian Schulz & Fabian Siuda, 2023. "Marriage and divorce: the role of unemployment insurance," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(4), pages 2277-2308, October.
    • Handle: RePEc:spr:jopoec:v:36:y:2023:i:4:d:10.1007_s00148-023-00961-1
    DOI: 10.1007/s00148-023-00961-1
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