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Female earnings and the divorce rate: a simultaneous equations model

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  • Rand Ressler
  • Melissa Waters
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    Abstract

    Economists have contributed a great deal of research, both theoretical and empirical, to the study of marital formation and dissolution. Many empirical examinations of marriage and divorce rates exist based on Becker's seminal contributions to the literature. All of these divorce studies are single equation models, with female earnings assumed exogenous. As discussed by Becker (1981), however, causality may run in the opposite direction as well: the divorce rate may influence female earnings. This paper estimates a simultaneous equations model in which divorce rates and female earnings are the jointly endogenous variables. Data are by state, for 1960, 1970, 1980 and 1990. The state-wide divorce rate equation is an extension of Waters and Ressler (1999), and the specification of a state-wide earnings equation follows standard human capital theory. The specification of joint endogeneity between female earnings and the divorce rate allows valid inferences to be made regarding the effect of female earnings on divorce for the first time. Most previous single equation studies of divorce have found that increases in female earnings significantly increase divorce rates. A simultaneous equations model will allow inferences to be made regarding the possibility of joint determination, which may cause a reevaluation of previous results.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 32 (2000)
    Issue (Month): 14 ()
    Pages: 1889-1898

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    Handle: RePEc:taf:applec:v:32:y:2000:i:14:p:1889-1898

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    Cited by:
    1. Sonya Britt & Sandra Huston, 2012. "The Role of Money Arguments in Marriage," Journal of Family and Economic Issues, Springer, vol. 33(4), pages 464-476, December.
    2. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes & Madeline Zavodny, 2002. "The impact of welfare reform on marriage and divorce," Working Paper 2002-9, Federal Reserve Bank of Atlanta.
    3. David Johnson & Guyonne Kalb, 2002. "Economic Analyses of Families: Existing Research Findings," Melbourne Institute Working Paper Series wp2002n27, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    4. González-Val, Rafael & Marcén, Miriam, 2012. "Unilateral divorce versus child custody and child support in the U.S," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 613-643.
    5. John M. Nunley & Alan Seals, 2010. "The Effects of Household Income Volatility on Divorce," American Journal of Economics and Sociology, Wiley Blackwell, vol. 69(3), pages 983-1010, 07.
    6. Bruce Phillips & William Griffiths, 2002. "Female Earnings And Divorce Rates:Some Australian Evidence," Department of Economics - Working Papers Series 850, The University of Melbourne.
    7. González-Val, Rafael & Marcén, Miriam, 2010. "Unilateral Divorce vs. Child Custody and Child Support in the U.S," MPRA Paper 24695, University Library of Munich, Germany.
    8. Chris Herbst, 2011. "The Impact of the Earned Income Tax Credit on Marriage and Divorce: Evidence from Flow Data," Population Research and Policy Review, Springer, vol. 30(1), pages 101-128, February.
    9. Stefan Sperlich & Juan M. Rodr�guez-Póo & Ana I. Fernández, 2005. "Semiparametric three-step estimation methods for simultaneous equation systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(6), pages 699-721.

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