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Job Displacement, Disability, and Divorce

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Author Info
Kerwin Kofi Charles
Melvin Stephens Jr.
Abstract

This paper examines how job displacement and physical disability suffered by a spouse affects the probability that the person's marriage ends in divorce. According to the standard economic model of marriage, the arrival of new information about a partner's earning capacity that a negative earnings shock conveys might affect the gains that the couple believes it will receive from remaining married. Shocks may therefore affect divorce probability. Little previous work has explored this issue. The few efforts that exist use no explicit measures of earning shocks. Using the Panel Study of Income Dynamics, this paper finds an increase in the probability of divorce following a spouse's job displacement but no change in divorce probability after a spousal disability. This difference casts doubt on a purely pecuniary motivation for divorce following earnings shocks, since both types of shocks exhibit similar long-run economic consequences. Furthermore, the increase in divorce is found only for layoffs and not for plant closings which suggests that information conveyed about a partner's non-economic suitability as a mate due to a job loss may be more important than the financial losses in precipitating a divorce.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8578.

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Date of creation: Nov 2001
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Handle: RePEc:nbr:nberwo:8578

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  3. John Bound & Michael Schoenbaum & Todd R. Stinebrickner & Timothy Waidmann, 1998. "The Dynamic Effects of Health on the Labor Force Transitions of Older Workers," NBER Working Papers 6777, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Kenkel, Donald S, 1991. "Health Behavior, Health Knowledge, and Schooling," Journal of Political Economy, University of Chicago Press, vol. 99(2), pages 287-305, April. [Downloadable!] (restricted)
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  5. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier. [Downloadable!] (restricted)
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  8. Peters, H Elizabeth, 1993. "The Importance of Financial Considerations in Divorce Decisions," Economic Inquiry, Oxford University Press, vol. 31(1), pages 71-86, January.
  9. Stevens, Ann Huff, 1997. "Persistent Effects of Job Displacement: The Importance of Multiple Job Losses," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 165-88, January. [Downloadable!] (restricted)
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  11. Cullen, Julie Berry & Gruber, Jonathan, 2000. "Does Unemployment Insurance Crowd Out Spousal Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 546-72, July. [Downloadable!] (restricted)
  12. Lillard, L.A. & Waite, L.J., 1993. "A Joint Model of Marital Childbearing and Marital Disruption," Papers 93-02, RAND - Labor and Population Program.
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  13. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-87, December. [Downloadable!] (restricted)
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  1. Marianne E. Page & Ann Huff Stevens, 2002. "Will You Miss Me When I Am Gone? The Economic Consequences of Absent Parents," NBER Working Papers 8786, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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