An Empirical Investigation of Household Dynamics
Using a Canadian micro data set, this paper uses econometric techniques to investigate the impact of public goods and public policy on the decisions to marry and divorce. Among other things, we find that public goods (home ownership, presence of children in the home, shiftwork) have a clear impact on the probability of divorce. From a policy perspective, we examine how the introduction of the 1997 Child Support Guidelines affects household formation and dissolution. While their impact on marriage is insignificant, we find that the new Guidelines have an important positive effect on the probabity of divorce.
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