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The Effects of Household Income Volatility on Divorce

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  • John M. Nunley
  • Alan Seals

Abstract

We extend the literature on the effects of earnings shocks on divorce by identifying separately the effects of transitory and permanent household income shocks and by allowing the shocks to have asymmetric effects across education and racial groups. The econometric evidence suggests negative (positive) transitory household income shocks increase (decrease) the probability of divorce, while there is only weak evidence that positive (negative) permanent household income shocks raise (lower) the probability of divorce. Some differences in the effects of household income shocks on divorce propensities arise for subsamples selected by education and race.

Suggested Citation

  • 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, July.
  • Handle: RePEc:bla:ajecsc:v:69:y:2010:i:3:p:983-1010
    DOI: 10.1111/j.1536-7150.2010.00731.x
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    Cited by:

    1. Mohammad Reza Farzanegan & Hassan Fereidouni Gholipour, 2016. "Divorce and the cost of housing: evidence from Iran," Review of Economics of the Household, Springer, vol. 14(4), pages 1029-1054, December.
    2. Jeffrey Anvari-Clark & David Ansong, 2022. "Predicting Financial Well-Being Using the Financial Capability Perspective: The Roles of Financial Shocks, Income Volatility, Financial Products, and Savings Behaviors," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 730-743, December.
    3. Bradley Hardy, 2014. "Childhood Income Volatility and Adult Outcomes," Demography, Springer;Population Association of America (PAA), vol. 51(5), pages 1641-1665, October.
    4. Pierre–André Chiappori & Natalia Radchenko & Bernard Salanié, 2018. "Divorce and the duality of marital payoff," Review of Economics of the Household, Springer, vol. 16(3), pages 833-858, September.

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    More about this item

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • D10 - Microeconomics - - Household Behavior - - - General

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