Yours, Mine and Ours: Do Divorce Laws affect the Intertemporal Behavior of Married Couples??
Divorce laws establish spouses' individual property rights over household resources and determine when divorce is allowed. This paper examines how such laws influence the intertemporal behavior and the welfare of U.S. married couples. I build a model of household choice about consumption, labor supply and divorce under multiple divorce law regimes and I estimate it using exogenous variation in U.S. divorce laws from the 1970s to the 1990s. Couples responded to equal division of property and unilateral divorce by increasing tangible assets up to 19%, which suggests the presence of a strong income effect for the primary earner, and by reducing female employment by over 5 percentage points, because the threat of divorce granted additional bargaining power to married woman. The bargaining weight of women implied by these responses in the model corresponds to a third of the weight of men. This indicates that equal division of assets benefited women when it was first introduced, as they has such low weight in marriage decision. However, counterfactual experiments show that equal division may be potentially detrimental to women as they gain equality in their marriage. When men and women have the same bargaining weight, women are better off in a separate property regime, as they may need more assets than their husband to smooth consumption when going into a divorce.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Saku Aura, 2002.
"Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining,"
CESifo Working Paper Series
801, CESifo Group Munich.
- Saku Aura, 2002. "Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining," Working Papers 0217, Department of Economics, University of Missouri.
- Saku Aura, 2003. "Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining," Microeconomics 0304002, EconWPA.
- Goldin, Claudia, 2006. "The Quiet Revolution That Transformed Womenâ€™s Employment, Education, and Family," Scholarly Articles 2943933, Harvard University Department of Economics.
- Gonzalez, Libertad & Özcan, Berkay, 2008.
"The Risk of Divorce and Household Saving Behavior,"
IZA Discussion Papers
3726, Institute for the Study of Labor (IZA).
- Libertad González Luna & Berkay Özcan, 2008. "The risk of divorce and household saving behavior," Economics Working Papers 1111, Department of Economics and Business, Universitat Pompeu Fabra.
- Libertad González & Berkay Özcan, 2008. "The risk of divorce and household saving behavior," LSE Research Online Documents on Economics 38463, London School of Economics and Political Science, LSE Library.
- Orazio Attanasio & Hamish Low & Virginia Sanchez-Marcos, 2008.
"Explaining Changes in Female Labor Supply in a Life-Cycle Model,"
American Economic Review,
American Economic Association, vol. 98(4), pages 1517-52, September.
- Virginia Sanchez-Marcos & Orazio Attanasio & Hamish Low, 2004. "Explaining Changes in Female Labour Supply in a Life-Cycle Model," 2004 Meeting Papers 492, Society for Economic Dynamics.
- Attanasio, O. & Low, H. & Sanchez-Marcos, V., 2004. "Explaining Changes in Female Labour Supply in a Life-cycle Model," Cambridge Working Papers in Economics 0451, Faculty of Economics, University of Cambridge.
- Powers, Elizabeth T., 1998. "Does means-testing welfare discourage saving? evidence from a change in AFDC policy in the United States," Journal of Public Economics, Elsevier, vol. 68(1), pages 33-53, April.
- Orazio P. Attanasio & Guglielmo Weber, 1994.
"Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey,"
NBER Working Papers
4795, National Bureau of Economic Research, Inc.
- Attanasio, Orazio P & Weber, Guglielmo, 1995. "Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1121-57, December.
- François Bourguignon & Martin Browning & Pierre-André Chiappori, 2006.
"Efficient Intra-household Allocations and Distribution Factors: Implications and Identification,"
CAM Working Papers
2006-02, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
- François Bourguignon & Martin Browning & Pierre-André Chiappori, 2009. "Efficient Intra-Household Allocations and Distribution Factors: Implications and Identification," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 503-528.
- François Bourguignon & Martin Browning & Pierre-André Chiappori, 2009. "Efficient Intra-Household Allocations and Distribution Factors: Implications and Identification," Post-Print halshs-00754386, HAL.
When requesting a correction, please mention this item's handle: RePEc:red:sed010:1329. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.