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Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly-Formed Partnerships

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  • Jeanne Lafortune
  • Pierre-Andre Chiappori
  • Murat Iyigun
  • Yoram Weiss

Abstract

The paper analyzes the effect of a reform granting alimony rights to cohabiting couples in Canada, exploiting the fact that each province extended these rights in different years and required different cohabitation length. A theoretical analysis, based on a collective household model with a matching framework, predicts that changes in alimony laws would affect existing couples and couples to-be differently. For existing couples, legislative changes aimed at favoring (wo)men do benefit them, especially if the match quality is low. However, for couples not yet formed, they generate offsetting intra-household transfers (in our model, of leisure) and lower intra-marital allocations for the spouses who are the intended beneficiary. Our empirical analysis confirms these predictions. Among cohabiting couples united long enough before the reform, obtaining the right to petition for alimony led women to lower their labor force participation. These results, however, do not hold | and, in some cases, are reversed for newly formed cohabiting couples.

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Bibliographic Info

Paper provided by Instituto de Economia. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number 424.

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Date of creation: 2012
Date of revision:
Handle: RePEc:ioe:doctra:424

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Related research

Keywords: Alimony; Cohabitation; Bargaining; Policy neutrality; Labor supply;

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References

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  1. repec:bla:restud:v:74:y:2007:i:3:p:857-895 is not listed on IDEAS
  2. Clark, Simon, 1999. "Law, Property, and Marital Dissolution," Economic Journal, Royal Economic Society, vol. 109(454), pages C41-54, March.
  3. Maurizio Mazzocco, 2007. "Household Intertemporal Behaviour: A Collective Characterization and a Test of Commitment," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 857-895.
  4. Jeanne Lafortune, 2013. "Making Yourself Attractive: Pre-marital Investments and the Returns to Education in the Marriage Market," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 151-78, April.
  5. Pierre-Andre Chiappori & Murat Iyigun & Yoram Weiss, 2008. "An Assignment Model with Divorce and Remarriage," Working Papers 2009-002, Becker Friedman Institute for Research In Economics.
  6. Imran Rasul, 2006. "Marriage Markets and Divorce Laws," Journal of Law, Economics and Organization, Oxford University Press, vol. 22(1), pages 30-69, April.
  7. Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2006. "Investment in Schooling and the Marriage Market," IZA Discussion Papers 2454, Institute for the Study of Labor (IZA).
  8. Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2007. "Public Goods, Transferable Utility and Divorce Laws," IZA Discussion Papers 2646, Institute for the Study of Labor (IZA).
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Cited by:
  1. René Böheim & Mario Francesconi & Martin Halla, 2012. "Does custody law affect family behavior in and out of marriage?," NRN working papers 2012-15, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  2. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Frederic Vermeulen, 2014. "Household Consumption When the Marriage is Stable," Working Papers ECARES ECARES 2014-21, ULB -- Universite Libre de Bruxelles.

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