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Female Labor Supply and Divorce: New Evidence from Ireland

Author

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  • Bargain, Olivier

    (Université Montesquieu Bordeaux IV)

  • Gonzalez, Libertad

    (Universitat Pompeu Fabra)

  • Keane, Claire

    (ESRI, Dublin)

  • Özcan, Berkay

    (London School of Economics)

Abstract

If participation in the labor market helps to secure women's outside options in the case of divorce/separation, an increase in the perceived risk of marital dissolution may accelerate the increase in female labor supply. This simple prediction has been tested in the literature using time and/or spatial variation in divorce legislation (e.g., across US states), leading to mixed results. In this paper, we suggest testing this hypothesis by exploiting a more radical policy change, i.e., the legalization of divorce. In Ireland, the right to divorce was introduced in 1996, followed by an acceleration of marriage breakdown rates. We use this fundamental change in the Irish society as a natural experiment. We follow a difference-in-difference approach, using families for whom the dissolution risk is small as a control group. Our results suggest that the legalization of divorce contributed to a significant increase in female labor supply, mostly at the extensive margin. Results are not driven by selection and are robust to several specification checks, including the introduction of household fixed effects and an improved match between control and treatment groups using propensity score reweighting.

Suggested Citation

  • Bargain, Olivier & Gonzalez, Libertad & Keane, Claire & Özcan, Berkay, 2010. "Female Labor Supply and Divorce: New Evidence from Ireland," IZA Discussion Papers 4959, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp4959
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    Cited by:

    1. Alice Goisis & Berkay Özcan & Philippe Van Kerm, 2019. "Do Children Carry the Weight of Divorce?," Demography, Springer;Population Association of America (PAA), vol. 56(3), pages 785-811, June.
    2. Jennifer Roff, 2017. "Cleaning in the Shadow of the Law? Bargaining, Marital Investment, and the Impact of Divorce Law on Husbands' Intrahousehold Work," Journal of Law and Economics, University of Chicago Press, vol. 60(1), pages 115-134.
    3. Simen Markussen & Marte Strøm, 2022. "Children and labor market outcomes: separating the effects of the first three children," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(1), pages 135-167, January.
    4. Lundborg, Petter & Plug, Erik & Rasmussen, Astrid Würtz, 2014. "Fertility Effects on Female Labor Supply: IV Evidence from IVF Treatments," IZA Discussion Papers 8609, Institute of Labor Economics (IZA).
    5. Sansone, Dario, 2019. "Pink work: Same-sex marriage, employment and discrimination," Journal of Public Economics, Elsevier, vol. 180(C).
    6. Libertad Gonzalez, 2014. "Should divorce be easier or harder?," IZA World of Labor, Institute of Labor Economics (IZA), pages 113-113, December.
    7. Olivier Bargain & Jordan Loper & Roberta Ziparo, 2020. "Traditional Norms, Access to Divorce and Women’s Empowerment: Evidence from Indonesia," Bordeaux Economics Working Papers 2020-14, Bordeaux School of Economics (BSE).
    8. Heggeness, Misty L., 2020. "Improving child welfare in middle income countries: The unintended consequence of a pro-homemaker divorce law and wait time to divorce," Journal of Development Economics, Elsevier, vol. 143(C).
    9. Friedman-Sokuler, Naomi & Justman, Moshe, 2020. "Gender, culture and STEM: Counter-intuitive patterns in Arab society," Economics of Education Review, Elsevier, vol. 74(C).
    10. World Bank, 2013. "Montenegro Gender Diagnostic," World Bank Publications - Reports 21827, The World Bank Group.
    11. Terhi Maczulskij & Petri Böckerman, 2019. "Harsh times: do stressors lead to labor market losses?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(3), pages 357-373, April.
    12. Petter Lundborg & Erik Plug & Astrid Würtz Rasmussen, 2017. "Can Women Have Children and a Career? IV Evidence from IVF Treatments," American Economic Review, American Economic Association, vol. 107(6), pages 1611-1637, June.
    13. 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.
    14. Alessandro Cigno, 2011. "The Economics of Marriage," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 28-41, May.
    15. García-Ramos, Aixa, 2021. "Divorce laws and intimate partner violence: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 150(C).
    16. Olivier Bargain & Jordan Loper & Roberta Ziparo, 2020. "Traditional Norms, Access to Divorce and Women’s Empowerment: Evidence from Indonesia," Working Papers hal-03258226, HAL.
    17. Sanna Huikari & Marko Korhonen & Mikko Puhakka, 2016. "’Til booze do us part: alcohol consumption and marital dissolution," Empirical Economics, Springer, vol. 51(2), pages 831-852, September.
    18. Doorley, Karina & Stancanelli, Elena G. F., 2019. "Marital Status and Retirement: An Empirical Study for France," IZA Discussion Papers 12299, Institute of Labor Economics (IZA).
    19. Hoehn-Velasco, Lauren & Penglase, Jacob, 2021. "Does unilateral divorce impact women’s labor supply? Evidence from Mexico," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 315-347.
    20. Matias Busso & Dario Romero Fonseca, 2015. "Female Labor Force Participation in Latin America: Patterns and Explanations," CEDLAS, Working Papers 0187, CEDLAS, Universidad Nacional de La Plata.

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    More about this item

    Keywords

    divorce law; natural experiment; labor supply; fixed effects; propensity score;
    All these keywords.

    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
    • D10 - Microeconomics - - Household Behavior - - - General
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law

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