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Financial implications of relationship breakdown: does marriage matter?

Author

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  • Hayley Fisher

    (Institute for Fiscal Studies)

  • Hamish Low

    () (Institute for Fiscal Studies and University of Oxford & Nuffield College)

Abstract

In raw data in the UK, the income loss on separation for women who were cohabiting is less than the loss for those who were married. Cohabitees lose less even after matching on observable characteristics including age and children. This difference is not explained by differences in access to benefits or labour supply responses after separation. We show that the difference arises because of differences in access to family support networks: cohabitees' household income falls by less because they are more likely to live with other adults, particularly their family, following separation, even after matching on age and children. Divorced women do not return to living with their extended families. The greater legal protection offered by marriage does not appear to translate into economic protection.

Suggested Citation

  • Hayley Fisher & Hamish Low, 2012. "Financial implications of relationship breakdown: does marriage matter?," IFS Working Papers W12/17, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:12/17
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    References listed on IDEAS

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    1. Hayley Fisher, 2012. "Divorce Property Division Laws and the Decision to Marry or Cohabit," Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(4), pages 734-753, October.
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    More about this item

    Keywords

    divorce; cohabitation; income loss; matching;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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