Job Displacement, Disability, and Divorce
Earnings shocks should affect divorce probability by changing a couple's expected gains from marriage. We find that the divorce hazard rises after a spouse's job displacement but does not change 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, suggesting that information conveyed about a partner's noneconomic suitability as a mate due to a job loss may be more important than financial losses in precipitating divorce.
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