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Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly-Formed Partnerships

  • Jeanne Lafortune
  • Pierre-Andre Chiappori
  • Murat Iyigun
  • Yoram Weiss

The paper analyzes the effect of a reform granting alimony rights to cohabiting couples in Canada, exploiting the fact that each province extended these rights in different years and required different cohabitation length. A theoretical analysis, based on a collective household model with a matching framework, predicts that changes in alimony laws would affect existing couples and couples to-be differently. For existing couples, legislative changes aimed at favoring (wo)men do benefit them, especially if the match quality is low. However, for couples not yet formed, they generate offsetting intra-household transfers (in our model, of leisure) and lower intra-marital allocations for the spouses who are the intended beneficiary. Our empirical analysis confirms these predictions. Among cohabiting couples united long enough before the reform, obtaining the right to petition for alimony led women to lower their labor force participation. These results, however, do not hold | and, in some cases, are reversed for newly formed cohabiting couples.

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Paper provided by Instituto de Economia. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number 424.

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Date of creation: 2012
Date of revision:
Handle: RePEc:ioe:doctra:424
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  1. Jeanne Lafortune, 2013. "Making Yourself Attractive: Pre-marital Investments and the Returns to Education in the Marriage Market," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 151-78, April.
  2. Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2008. "An Assignment Model with Divorce and Remarriage," IZA Discussion Papers 3892, Institute for the Study of Labor (IZA).
  3. Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2007. "Public Goods, Transferable Utility and Divorce Laws," IZA Discussion Papers 2646, Institute for the Study of Labor (IZA).
  4. Simon Clark, 1999. "Law, Property, and Marital Dissolution," ESE Discussion Papers 32, Edinburgh School of Economics, University of Edinburgh.
  5. Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 2002. "Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 209-244.
  6. Shintaro Yamaguchi & Claudia Ruiz & Maurizio Mazzocco, 2014. "Labor Supply, Wealth Dynamics and Marriage Decisions," 2014 Meeting Papers 210, Society for Economic Dynamics.
  7. Pierre-Andre Chiappori & Yoram Weiss & Murat Iyigun & Yoram Weiss, 2006. "Investment in Schooling and the Marriage Market," 2006 Meeting Papers 43, Society for Economic Dynamics.
  8. repec:bla:restud:v:74:y:2007:i:3:p:857-895 is not listed on IDEAS
  9. Maurizio Mazzocco, 2007. "Household Intertemporal Behaviour: A Collective Characterization and a Test of Commitment," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 857-895.
  10. Imran Rasul, 2006. "Marriage Markets and Divorce Laws," Journal of Law, Economics and Organization, Oxford University Press, vol. 22(1), pages 30-69, April.
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