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

  • Papps, Kerry L.

    ()

    (University of Bath)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2395.

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Length: 46 pages
Date of creation: Oct 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2395
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  8. Shannon N. Seitz, 1999. "Labor Supply, Divorce and Remarriage," UWO Department of Economics Working Papers 9902, University of Western Ontario, Department of Economics.
  9. Teresa Martin & Larry Bumpass, 1989. "Recent trends in marital disruption," Demography, Springer, vol. 26(1), pages 37-51, February.
  10. van der Klaauw, Wilbert, 1996. "Female Labour Supply and Marital Status Decisions: A Life-Cycle Model," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 199-235, April.
  11. Sen, Bisakha, 2000. "How important is anticipation of divorce in married women's labor supply decisions? An intercohort comparison using NLS data," Economics Letters, Elsevier, vol. 67(2), pages 209-216, May.
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  17. Haurin, Donald R, 1989. "Women's Labor Market Reactions to Family Disruptions," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 54-61, February.
  18. Siobhan Austen, 2004. "Labour Supply and the Risk of Divorce: An Analysis of Australian Data," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(2), pages 153-165, 06.
  19. William R. Johnson & Jonathan Skinner, 1988. "Accounting for Changes in the Labor Supply of Recently Divorced Women," Journal of Human Resources, University of Wisconsin Press, vol. 23(4), pages 417-436.
  20. Ahituv, Avner & Lerman, Robert I., 2005. "How Do Marital Status, Wage Rates, and Work Commitment Interact?," IZA Discussion Papers 1688, Institute for the Study of Labor (IZA).
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  22. Cornwell, Christopher & Rupert, Peter, 1997. "Unobservable Individual Effects, Marriage and the Earnings of Young Men," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 285-94, April.
  23. Guido Heineck, 2002. "Does Religion Influence the Labour Supply of Married Women in Germany?," Discussion Papers of DIW Berlin 278, DIW Berlin, German Institute for Economic Research.
  24. Johnson, William R & Skinner, Jonathan, 1986. "Labor Supply and Marital Separation," American Economic Review, American Economic Association, vol. 76(3), pages 455-69, June.
  25. Chun, Hyunbae & Lee, Injae, 2001. "Why Do Married Men Earn More: Productivity or Marriage Selection?," Economic Inquiry, Western Economic Association International, vol. 39(2), pages 307-19, April.
  26. Johnson John H., 2004. "Do Long Work Hours Contribute to Divorce?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-25, October.
  27. Blackburn, McKinley & Korenman, Sanders, 1994. "The Declining Marital-Status Earnings Differential," Journal of Population Economics, Springer, vol. 7(3), pages 247-70, July.
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