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Financial implications of relationship breakdown: does marriage matter?

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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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    Cited by:

    1. Gallipoli, Giovanni & Low, Hamish & Mitra, Aruni, 2020. "Consumption and Income Inequality across Generations," CEPR Discussion Papers 15166, C.E.P.R. Discussion Papers.
    2. Goussé, Marion & Leturcq, Marion, 2022. "More or less unmarried. The impact of legal settings of cohabitation on labour market outcomes," European Economic Review, Elsevier, vol. 149(C).
    3. Céline Le Bourdais & Sung-Hee Jeon & Shelley Clark & Évelyne Lapierre-Adamcyk, 2016. "Impact of conjugal separation on women’s income in Canada: Does the type of union matter?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 35(50), pages 1489-1522.
    4. Maude Pugliese & David Pelletier & Céline Bourdais, 2023. "Separation and Savings in Tax-Favored Retirement Accounts Among Canadian Men and Women," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(4), pages 1-33, August.
    5. Hanno Foerster, 2019. "The Impact of Post-Marital Maintenance on Dynamic Decisions and Welfare of Couples," Boston College Working Papers in Economics 982, Boston College Department of Economics.
    6. Hanno Foerster, 2019. "Untying the Knot: How Child Support and Alimony Affect Couples' Decisions and Welfare," CRC TR 224 Discussion Paper Series crctr224_2019_115v2, University of Bonn and University of Mannheim, Germany.
    7. Michael J. Thomas & Clara H. Mulder & Thomas J. Cooke, 2018. "Geographical Distances Between Separated Parents: A Longitudinal Analysis," European Journal of Population, Springer;European Association for Population Studies, vol. 34(4), pages 463-489, October.
    8. Marion Leturcq & Lidia Panico, 2019. "The Long-Term Effects of Parental Separation on Childhood Multidimensional Deprivation: A Lifecourse Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(2), pages 921-954, July.

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    More about this item

    Keywords

    divorce; cohabitation; income loss; matching;
    All these keywords.

    JEL classification:

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

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