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The effect of property division laws on divorce and labor supply: evidence from Spain

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  • Brassiolo, Pablo

Abstract

I study how the relative bargaining position of spouses affects the incidence of marital dissolution and the labor supply decision of intact couples. I identify exogenous variation in bargaining position within the household by exploiting a natural experiment in Spain where different regions have different rules to divide marital property in case of divorce. I benefit from two law changes to the separation of property regime in Catalonia, with opposite expected effects on the bargaining position of spouses. I found that a reform that unexpectedly improved the position of the wife within the marriage increased the divorce rate in around 13 percent in the short run, and although this effect seemed to dissipate over time, it remained positive one decade afterwards. For intact couples, I find that the same reform caused a reduction in female labor supply of between 0.6 and 2.5 hours per week, and also a reduction in their probability of employment of 2 percent. Moreover, when the previous improvement in wives' bargaining position was undone by a reform to the scope of marital contracts, female labor supply reacted in the opposite way, with an increase in hours worked and the probability of employment.

Suggested Citation

  • Brassiolo, Pablo, 2013. "The effect of property division laws on divorce and labor supply: evidence from Spain," Research Department working papers 246, CAF Development Bank Of Latinamerica.
  • Handle: RePEc:dbl:dblwop:246
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    Cited by:

    1. Nicolas Frémeaux & Marion Leturcq, 2013. "Plus ou moins mariés : l'évolution du mariage et des régimes matrimoniaux en France," Économie et Statistique, Programme National Persée, vol. 462(1), pages 125-151.
    2. Stephanie Lluis & Yazhuo (Annie) Pan, 2018. "Marital Property Laws and Women’s Labour Supply," Working Papers 1809, University of Waterloo, Department of Economics, revised 12 Nov 2018.
    3. Schaubert, Marianna, 2018. "Do Alimony Regulations Matter inside Marriage? Evidence from the 2008 Reform of the German Maintenance Law," EconStor Preprints 173193, ZBW - Leibniz Information Centre for Economics.
    4. Schaubert, Marianna, 2018. "Do Alimony Regulations Matter inside Marriage? Evidence from the 2008 Reform of the German Maintenance Law," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181508, Verein für Socialpolitik / German Economic Association.
    5. Marion Goussé & Marion Leturcq, 2018. "More or Less Unmarried. The Impact of Legal Settings of Cohabitation on Labor Market Outcomes," Cahiers de recherche 1808, Centre de recherche sur les risques, les enjeux économiques, et les politiques publiques.
    6. Frémeaux, Nicolas & Leturcq, Marion, 2018. "Prenuptial agreements and matrimonial property regimes in France, 1855–2010," Explorations in Economic History, Elsevier, vol. 68(C), pages 132-142.

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