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For Better or for Worse, But How About a Recession?

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  • Jeremy Arkes
  • Yu-Chu Shen
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    Abstract

    In light of the current economic crisis, we estimate hazard models of divorce to determine how state and national unemployment rates affect the likelihood of divorce. With 89,340 observations over the 1978-2006 period for 7633 couples from the 1979 NLSY, we find mixed evidence on whether increases in the unemployment rate lead to overall increases in the likelihood of divorce, which would suggest countercyclical divorce probabilities. However, further analysis reveals that the weak evidence is due to the weak economy increasing the risk of divorce only for couples in years 6 to 10 of marriage. For couples in years 1 to 5 and couples married longer than 10 years, there is no evidence of a pattern between the strength of the economy and divorce probabilities. The estimates are generally stronger in magnitude when using national instead of state unemployment rates.

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    File URL: http://www.nber.org/papers/w16525.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16525.

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    Date of creation: Nov 2010
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    Publication status: published as Arkes, J. and Shen Y. 2013. For Better or for Worse, but What About a Recession? Contemporary Economic Policy, 32(2): 275-287.
    Handle: RePEc:nbr:nberwo:16525

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    Cited by:
    1. Hellerstein, Judith K. & Morrill, Melinda Sandler & Zou, Ben, 2013. "Business cycles and divorce: Evidence from microdata," Economics Letters, Elsevier, vol. 118(1), pages 68-70.
    2. Kristen Harknett & Daniel Schneider, 2012. "Is a Bad Economy Good for Marriage? The Relationship between Macroeconomic Conditions and Marital Stability from 1998-2009," Working Papers 1375, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing..
    3. Melissa Ruby Banzhaf, 2013. "When It Rains It Pours: Under What Circumstances Does Job Loss Lead to Divorce," Working Papers 13-62, Center for Economic Studies, U.S. Census Bureau.

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