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The Effects of Divorce Risk on the Labour Supply of Married Couples

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  • Papps, Kerry L.

    () (University of Bath)

Abstract

This paper presents a model of lifetime utility maximisation in which expectations of future marital transitions play a role in the determination of work hours. Married people with spouses who earn more are predicted to devote additional time to the labour market when they are confronted with a high likelihood of divorce and vice versa. Similarly, work hours should be positively associated with marriage probability for those single people who expect to marry a higher earning spouse. These predictions are tested using data from the National Longitudinal Survey of Youth 1979. Marriage and divorce probabilities are calculated from Cox proportional hazard models and are included in regressions of annual hours. Married women are found to work more when they face a high probability of divorce. This relationship holds both over an individual’s life-cycle and across people with different inherent risks of divorce. Similar results are found when a woman’s happiness with her marriage is used as a proxy for divorce risk.

Suggested Citation

  • Papps, Kerry L., 2006. "The Effects of Divorce Risk on the Labour Supply of Married Couples," IZA Discussion Papers 2395, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2395
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    References listed on IDEAS

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    Cited by:

    1. Libertad González & Berkay Özcan, 2013. "The Risk of Divorce and Household Saving Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 48(2), pages 404-434.
    2. Bargain, Olivier & González, Libertad & Keane, Claire & Özcan, Berkay, 2012. "Female labor supply and divorce: New evidence from Ireland," European Economic Review, Elsevier, vol. 56(8), pages 1675-1691.
    3. Kristin Mammen, 2008. "The Long-Term Effects of the Divorce Revolution: Health, Wealth, and Labor Supply," Working Papers, Center for Retirement Research at Boston College wp2008-22, Center for Retirement Research, revised Nov 2008.
    4. Raquel Fernández & Joyce C. Wong, 2014. "Divorce Risk, Wages, and Working Wives: A Quantitative Life-Cycle Analysis of Female Labor Force Participation," NBER Working Papers 19869, National Bureau of Economic Research, Inc.
    5. Hans Fehr & Manuel Kallweit & Fabian Kindermann, 2009. "Marital Risk, Family Insurance, and Public Policy," SOEPpapers on Multidisciplinary Panel Data Research 226, DIW Berlin, The German Socio-Economic Panel (SOEP).

    More about this item

    Keywords

    divorce; labour supply; hazard models;

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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