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When It Rains It Pours: Under What Circumstances Does Job Loss Lead to Divorce

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  • Melissa Ruby Banzhaf
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    Abstract

    Much of the previous research that has examined the effect of job loss on the probability of divorce rely on data from the 1970s-80s, a period of dramatic change in marital formation and dissolution. It is unclear how well this research pertains to more recent trends in marriage, divorce, and female labor force participation. This study uses data from the Survey of Income and Program Participation (SIPP) from 2000 to 2012 (thus including effects of the Great Recession) to examine how displacement (i.e., exogenous job loss) affects the probability of divorce. The author finds clear evidence that the effects of displacement appear to be asymmetric depending upon the gender of the job loser. Specifically, displacement significantly increases the probability of divorce but only if the husband is the spouse that is displaced and his earnings represented approximately half of the household’s earnings prior to displacement. Similarly, results show that the probability of divorce increases if the wife is employed and as her earnings increase. While the mechanism behind these asymmetric results remains unclear, these results are consistent with recent research that finds a destabilizing effect on marriages when a wife earns more than her husband.

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    File URL: ftp://ftp2.census.gov/ces/wp/2013/CES-WP-13-62.pdf
    File Function: First version, 2013
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    Bibliographic Info

    Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 13-62.

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    Length: 49 pages
    Date of creation: Dec 2013
    Date of revision:
    Handle: RePEc:cen:wpaper:13-62

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    Keywords: divorce; job loss; displacement;

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    References

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    1. Perry Singleton, 2009. "Insult to Injury: Disability, Earnings, and Divorce," Working Papers, Center for Retirement Research at Boston College wp2009-25, Center for Retirement Research, revised Nov 2009.
    2. Painter, Gary & Levine, David I., 1999. "Family Structure and Youths' Outcomes: Which Correlations are Causal?," Institute for Research on Labor and Employment, Working Paper Series qt3g7899gz, Institute of Industrial Relations, UC Berkeley.
    3. Bredemeier, Christian & Juessen, Falko, 2010. "Assortative Mating and Female Labor Supply," IZA Discussion Papers 5118, Institute for the Study of Labor (IZA).
    4. Stevenson, Betsey & Wolfers, Justin, 2007. "Marriage and Divorce: Changes and their Driving Forces," IZA Discussion Papers 2602, Institute for the Study of Labor (IZA).
    5. John Kane & Lawrence M Spizman & James Rodgers & Rick R Gaskins, 2010. "The Effect of the Loss of a Parent on the Future Earnings of a Minor Child," Eastern Economic Journal, Palgrave Macmillan, vol. 36(3), pages 370-390.
    6. Marianne Bertrand & Jessica Pan & Emir Kamenica, 2013. "Gender Identity and Relative Income within Households," NBER Working Papers 19023, National Bureau of Economic Research, Inc.
    7. Shelly Lundberg, 2010. "Personality and Marital Surplus," SOEPpapers on Multidisciplinary Panel Data Research 307, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Martin Farnham & Lucie Schmidt & Purvi Sevak, 2011. "House Prices and Marital Stability," American Economic Review, American Economic Association, vol. 101(3), pages 615-19, May.
    9. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    10. Perry Singleton, 2012. "Insult to Injury: Disability, Earnings, and Divorce," Journal of Human Resources, University of Wisconsin Press, vol. 47(4), pages 972-990.
    11. Jonathan Gruber, 2004. "Is Making Divorce Easier Bad for Children? The Long-Run Implications of Unilateral Divorce," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 799-834, October.
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