IDEAS home Printed from https://ideas.repec.org/p/pit/wpaper/329.html
   My bibliography  Save this paper

Lucky in Life, Unlucky in Love? The Effect of Random Income Shocks on Marriage and Divorce

Author

Listed:
  • Mark Hoekstra
  • Scott Hankins

Abstract

Economists have long been interested in the extent to which economic resources affect decisions to marry and divorce. For married couples, an increase in resources can either provide a stabilization effect or, alternatively, can enable divorce by allowing the couple to overcome costs associated with divorce. Similarly, while economic theory predicts that an increase in income makes an unmarried person more attractive to potential marriage partners, it may also make single life more attractive. However, answering these questions empirically has been difficult due to a lack of exogenous income shocks. We overcome this problem by exploiting the randomness of the Florida Lottery and comparing recipients of large prizes to those of small prizes. Results indicate that while positive income shocks of $25,000 to $50,000 do not cause statistically significant or economically meaningful changes in divorce rates, single women are less likely to marry as a result of the additional income.

Suggested Citation

  • Mark Hoekstra & Scott Hankins, 2007. "Lucky in Life, Unlucky in Love? The Effect of Random Income Shocks on Marriage and Divorce," Working Paper 329, Department of Economics, University of Pittsburgh, revised Jul 2010.
    • Handle: RePEc:pit:wpaper:329
    as

    Download full text from publisher

    File URL: http://www.econ.pitt.edu/papers/Mark_marriage&divorce.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
    2. Melvin Stephens Jr., 2003. ""3rd of tha Month": Do Social Security Recipients Smooth Consumption Between Checks?," American Economic Review, American Economic Association, vol. 93(1), pages 406-422, March.
    3. Lyle P. Groeneveld & Nancy Brandon Tuma & Michael T. Hannan, 1980. "The Effects of Negative Income Tax Programs on Marital Dissolution," Journal of Human Resources, University of Wisconsin Press, vol. 15(4), pages 654-674.
    4. Guido W. Imbens & Donald B. Rubin & Bruce I. Sacerdote, 2001. "Estimating the Effect of Unearned Income on Labor Earnings, Savings, and Consumption: Evidence from a Survey of Lottery Players," American Economic Review, American Economic Association, vol. 91(4), pages 778-794, September.
    5. Marianne Bitler & Jonah Gelbach & Hilary Hoynes & Madeline Zavodny, 2004. "The impact of welfare reform on marriage and divorce," Demography, Springer;Population Association of America (PAA), vol. 41(2), pages 213-236, May.
    6. David Laibson & Andrea Repetto & Jeremy Tobacman, 2000. "A Debt Puzzle," NBER Working Papers 7879, National Bureau of Economic Research, Inc.
    7. Johnson, William R & Skinner, Jonathan, 1986. "Labor Supply and Marital Separation," American Economic Review, American Economic Association, vol. 76(3), pages 455-469, June.
    8. Hausman, J. A. & Abrevaya, Jason & Scott-Morton, F. M., 1998. "Misclassification of the dependent variable in a discrete-response setting," Journal of Econometrics, Elsevier, vol. 87(2), pages 239-269, September.
    9. Wei-Yin Hu, 2003. "Marriage and Economic Incentives: Evidence from a Welfare Experiment," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
    10. Shapiro, Jesse M., 2005. "Is there a daily discount rate? Evidence from the food stamp nutrition cycle," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 303-325, February.
    11. Kerwin Kofi Charles & Melvin Stephens, 2004. "Job Displacement, Disability, and Divorce," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 489-522, April.
    12. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1.
    13. Jerry Hausman, 2001. "Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 57-67, Fall.
    14. Mark L. Hoekstra & Scott Hankins & Paige Marta Skiba, 2008. "The Ticket to Easy Street? The Financial Consequences of Winning the Lottery," Working Paper 344, Department of Economics, University of Pittsburgh, revised Mar 2010.
    15. Saul D. Hoffman & Greg J. Duncan, 1995. "The Effect of Incomes, Wages, and AFDC Benefits on Marital Disruption," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 19-41.
    16. David G. Schramm, 2006. "Individual and Social Costs of Divorce in Utah," Journal of Family and Economic Issues, Springer, vol. 27(1), pages 133-151, April.
    17. Mikael Lindahl, 2005. "Estimating the Effect of Income on Health and Mortality Using Lottery Prizes as an Exogenous Source of Variation in Income," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Health effects of non-health programs
      by Berk Ozler in Development Impact on 2012-07-12 08:29:03

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Scott Hankins & Mark Hoekstra, 2011. "Lucky in Life, Unlucky in Love?: The Effect of Random Income Shocks on Marriage and Divorce," Journal of Human Resources, University of Wisconsin Press, vol. 46(2), pages 403-426.
    2. Mark L. Hoekstra & Scott Hankins & Paige Marta Skiba, 2008. "The Ticket to Easy Street? The Financial Consequences of Winning the Lottery," Working Paper 344, Department of Economics, University of Pittsburgh, revised Mar 2010.
    3. Alisa C. Lewin, 2005. "The Effect of Economic Stability on Family Stability among Welfare Recipients," Evaluation Review, , vol. 29(3), pages 223-240, June.
    4. Bergolo, Marcelo & Galván, Estefanía, 2018. "Intra-household Behavioral Responses to Cash Transfer Programs. Evidence from a Regression Discontinuity Design," World Development, Elsevier, vol. 103(C), pages 100-118.
    5. Andrew Bibler & Mouhcine Guettabi & Matthew N. Reimer, 2023. "Universal Cash Transfers and Labor Market Outcomes," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(1), pages 198-224, January.
    6. Amit Kaplan & Anat Herbst-Debby, 2018. "Fragile Employment, Liquid Love: Employment Instability and Divorce in Israel," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 37(1), pages 1-31, February.
    7. Betsey Stevenson & Justin Wolfers, 2007. "Marriage and Divorce: Changes and their Driving Forces," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 27-52, Spring.
    8. Bruno Jeandidier & Lucile Bodson, 2010. "Revenus d'activité et désunion en Europe," Post-Print halshs-00521364, HAL.
    9. Justine Hastings & Ebonya Washington, 2010. "The First of the Month Effect: Consumer Behavior and Store Responses," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 142-162, May.
    10. Francine D. Blau, 1998. "Trends in the Well-Being of American Women, 1970-1995," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 112-165, March.
    11. González-Val, Rafael & Marcén, Miriam, 2012. "Unilateral divorce versus child custody and child support in the U.S," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 613-643.
    12. Leonard M. Lopoo & Kerri M. Raissian, 2014. "U.S. Social Policy and Family Complexity," The ANNALS of the American Academy of Political and Social Science, , vol. 654(1), pages 213-230, July.
    13. Fuchs-Schündeln, N. & Hassan, T.A., 2016. "Natural Experiments in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 923-1012, Elsevier.
    14. Giovanni Mastrobuoni & Matthew Weinberg, 2009. "Heterogeneity in Intra-monthly Consumption Patterns, Self-Control, and Savings at Retirement," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 163-189, August.
    15. Gustavo J. Bobonis, 2011. "The Impact of Conditional Cash Transfers on Marriage and Divorce," Economic Development and Cultural Change, University of Chicago Press, vol. 59(2), pages 281-312.
    16. Marianne Bitler & Jonah Gelbach & Hilary Hoynes & Madeline Zavodny, 2004. "The impact of welfare reform on marriage and divorce," Demography, Springer;Population Association of America (PAA), vol. 41(2), pages 213-236, May.
    17. C. Fritz Foley, 2008. "Welfare Payments and Crime," NBER Working Papers 14074, National Bureau of Economic Research, Inc.
    18. Grossbard, Shoshana, 1993. "On the Economics of Marriage - A Theory of Marriage, Labor and Divorce. Out of print. Published originally by Westview Press in 1993 under name Grossbard-Shechtman," MPRA Paper 81059, University Library of Munich, Germany.
    19. Ian Walker & Yu Zhu, 2004. "Child support liability and partnership dissolution," IFS Working Papers W04/18, Institute for Fiscal Studies.
    20. González-Val, Rafael & Marcén, Miriam, 2012. "Breaks in the breaks: An analysis of divorce rates in Europe," International Review of Law and Economics, Elsevier, vol. 32(2), pages 242-255.

    More about this item

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pit:wpaper:329. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Department of Economics, University of Pittsburgh (email available below). General contact details of provider: https://edirc.repec.org/data/depghus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.