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Financial implications of relationship breakdown: does marriage matter?

  • Hayley Fisher

    (Institute for Fiscal Studies)

  • Hamish Low

    ()

    (Institute for Fiscal Studies and Trinity College, Cambridge)

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.

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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W12/17.

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Date of creation: 09 Oct 2012
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Handle: RePEc:ifs:ifsewp:12/17
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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.
  2. Greg J. Duncan & Saul D. Hoffman, 1985. "Economic Consequences of Marital Instability," NBER Chapters, in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 427-470 National Bureau of Economic Research, Inc.
  3. Susan Averett & Laura Argys & Julia Sorkin, 2013. "In sickness and in health: an examination of relationship status and health using data from the Canadian National Public Health Survey," Review of Economics of the Household, Springer, vol. 11(4), pages 599-633, December.
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  7. GRABKA Markus & MARCUS Jan & SIERMINSKA Eva, 2013. "Wealth distribution within couples and financial decision making," LISER Working Paper Series 2013-02, LISER.
  8. Johnson, William R & Skinner, Jonathan, 1986. "Labor Supply and Marital Separation," American Economic Review, American Economic Association, vol. 76(3), pages 455-69, June.
  9. Aassve, Arnstein & Betti, Gianni & Mazzuco, Stefano & Mencarini, Letizia, 2006. "Marital disruption and economic well-being: a comparative analysis," ISER Working Paper Series 2006-07, Institute for Social and Economic Research.
  10. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
  11. Sankar Mukhopadhyay, 2008. "Do women value marriage more? The effect of obesity on cohabitation and marriage in the USA," Review of Economics of the Household, Springer, vol. 6(2), pages 111-126, June.
  12. Matthew Gray & Bruce Chapman, 2007. "Relationship break-down and the economic welfare of Australian mothers and their children," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 10(4), pages 253-277, December.
  13. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
  14. Joshua D. Angrist, 1995. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," NBER Working Papers 5192, National Bureau of Economic Research, Inc.
  15. Bedard, Kelly & Deschenes, Olivier, 2003. "Sex Preferences, Marital Dissolution and the Economic Status of Women," University of California at Santa Barbara, Economics Working Paper Series qt07g2372x, Department of Economics, UC Santa Barbara.
  16. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
  17. Suzanne Bianchi & Lekha Subaiya & Joan Kahn, 1999. "The gender gap in the economic well-being of nonresident fathers and custodial mothers," Demography, Springer;Population Association of America (PAA), vol. 36(2), pages 195-203, May.
  18. Uhrig, S.C. Noah, 2008. "The nature and causes of attrition in the British Household Panel Study," ISER Working Paper Series 2008-05, Institute for Social and Economic Research.
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