The Dynamics of Abusive Relationships

Domestic abuse encompasses a range of damaging behaviors beyond physical violence, including economic and emotional abuse. We analyze the impact of cohabiting with an abusive partner on victims’ economic outcomes. In so doing, we highlight the systematic role of economic suppression in such relationships. Using Finnish administrative data and a matched-control event-study design, along with a within-individual comparison of outcomes across relationships, we document three new facts. First, women who begin relationships with (eventually) physically abusive men suffer large and significant earnings and employment falls immediately upon cohabiting with the abusive partner. Second, the decline in economic outcomes is non-monotonic in women’s pre-cohabitation outside options. Third, men who are violent against women in any capacity impose economic costs on all their female partners, even those who do not report physical violence. To rationalize these findings, we develop a new dynamic model of abusive relationships where women do not perfectly observe their partner’s type, and abusive men have an incentive to use economic suppression to sabotage women’s outside options and their ability to later exit the relationship.