IDEAS home Printed from https://ideas.repec.org/p/syd/wpaper/2016-15.html
   My bibliography  Save this paper

The Effect of Changing Financial Incentives of Repartnering

Author

Listed:
  • Fisher, Hayley
  • Zhu, Anna.

Abstract

This paper examines how a reduction in the financial resources available to lone parents affects repartnering. We exploit an Australian natural experiment that reduced the financial resources available to a subset of separating parents. Using biweekly administrative data capturing separations occurring among low and middle income couples, we show that the policy reform significantly increased the repartnering hazard for affected separating mothers, especially those with low labour force attachment. Reconciliation with the woman's prior partner drives this result. Complementary analysis of an annual panel survey demonstrates that repartnering impacts are also present over the five years post-separation and that the impact on repartnering hazards is increasing in the extent of financial loss and the urgency of the impact. Together, these results demonstrate that one way that lone mothers respond to a reduction in financial resources available at the time of relationship breakdown is by repartnering more quickly.

Suggested Citation

  • Fisher, Hayley & Zhu, Anna., 2016. "The Effect of Changing Financial Incentives of Repartnering," Working Papers 2016-15, University of Sydney, School of Economics.
    • Handle: RePEc:syd:wpaper:2016-15
    as

    Download full text from publisher

    File URL: http://econ-wpseries.com/2016/201615.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chris Herbst, 2011. "The Impact of the Earned Income Tax Credit on Marriage and Divorce: Evidence from Flow Data," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 30(1), pages 101-128, February.
    2. Hayley Fisher, 2013. "The Effect of Marriage Tax Penalties and Subsidies on Marital Status," Fiscal Studies, Institute for Fiscal Studies, vol. 34, pages 437-465, December.
    3. Yin Fok & Duncan McVicar, 2013. "Did the 2007 welfare reforms for low income parents in Australia increase welfare exits?," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    4. Xiaodong Gong & Robert Breunig, 2014. "Channels of labour supply responses of lone parents to changed work incentives," Oxford Economic Papers, Oxford University Press, vol. 66(4), pages 916-939.
    5. Gregory Acs & Sandi Nelson, 2004. "Changes in living arrangements during the late 1990s: Do welfare policies matter?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(2), pages 273-290.
    6. repec:msl:workng:1008 is not listed on IDEAS
    7. Greg Duncan & Saul Hoffman, 1985. "A reconsideration of the economic consequences of marital dissolution," Demography, Springer;Population Association of America (PAA), vol. 22(4), pages 485-497, November.
    8. P. Jenkins, Stephen, 2008. "Marital splits and income changes over the longer term," ISER Working Paper Series 2008-07, Institute for Social and Economic Research.
    9. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2006. "Welfare Reform and Children's Living Arrangements," Journal of Human Resources, University of Wisconsin Press, vol. 41(1).
    10. Marco Francesconi & Wilbert van der Klaauw, 2007. "The Socioeconomic Consequences of "In-Work" Benefit Reform for British Lone Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 42(1).
    11. 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.
    12. Marco Francesconi & Helmut Rainer & Wilbert vanderKlaauw, 2009. "The Effects of In-Work Benefit Reform in Britain on Couples: Theory and Evidence," Economic Journal, Royal Economic Society, vol. 119(535), pages 66-100, February.
    13. Robert A. Moffitt & Brian J. Phelan & Anne E. Winkler, 2020. "Welfare Rules, Incentives, and Family Structure," Journal of Human Resources, University of Wisconsin Press, vol. 55(1), pages 1-42.
    14. 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.
    15. Garry F. Barrett, 2002. "The Dynamics of Participation in the Sole Parent Pension," The Economic Record, The Economic Society of Australia, vol. 78(240), pages 1-17, March.
    16. Sjoquist, David L. & Walker, Mary Beth, 1995. "The Marriage Tax and the Rate and Timing of Marriage," National Tax Journal, National Tax Association, vol. 48(4), pages 547-58, December.
    17. John Fitzgerald & David Ribar, 2004. "Welfare reform and female headship," Demography, Springer;Population Association of America (PAA), vol. 41(2), pages 189-212, May.
    18. Dan Anderberg, 2008. "Tax credits, income support, and partnership decisions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 499-526, August.
    19. Alm, James & Whittington, Leslie A., 1997. "Income taxes and the timing of marital decisions," Journal of Public Economics, Elsevier, vol. 64(2), pages 219-240, May.
    20. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-1187, December.
    21. James Alm & Leslie A. Whittington, 1999. "For Love or Money? The Impact of Income Taxes on Marriage," Economica, London School of Economics and Political Science, vol. 66(263), pages 297-316, August.
    22. Leslie A. Whittington & James Alm, 1997. "'Til Death or Taxes Do Us Part: The Effect of Income Taxation on Divorce," Journal of Human Resources, University of Wisconsin Press, vol. 32(2), pages 388-412.
    23. Niko Matouschek & Imran Rasul, 2008. "The Economics of the Marriage Contract: Theories and Evidence," Journal of Law and Economics, University of Chicago Press, vol. 51(1), pages 59-110, February.
    24. Martin Halla, 2013. "The Effect Of Joint Custody On Family Outcomes," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 278-315, April.
    25. Robert G. Gregory & Eva Klug & Prem J. Thapa, 2008. "Cut‐offs, Knock‐ons and Welfare Payment Taper Changes: An Evaluation of the July 2000 Tax and Welfare Changes for Lone Mothers," The Economic Record, The Economic Society of Australia, vol. 84(266), pages 291-309, September.
    26. Ian Walker & Yu Zhu, 2006. "Child Support and Partnership Dissolution," Economic Journal, Royal Economic Society, vol. 116(510), pages 93-109, March.
    27. David Brady & Rebekah Burroway, 2012. "Targeting, Universalism, and Single-Mother Poverty: A Multilevel Analysis Across 18 Affluent Democracies," Demography, Springer;Population Association of America (PAA), vol. 49(2), pages 719-746, May.
    28. Sjoquist, David L. & Walker, Mary Beth, 1995. "The Marriage Tax and the Rate and Timing of Marriage," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(4), pages 547-558, December.
    29. Denise J. Doiron, 2004. "Welfare Reform and the Labour Supply of Lone Parents in Australia: A Natural Experiment Approach," The Economic Record, The Economic Society of Australia, vol. 80(249), pages 157-176, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bruce Bradbury & Anna Zhu, 2018. "Welfare Entry and Exit after Marital Separation among Australian Mothers," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 405-423, December.
    2. Suziedelyte, Agne & Zhu, Anna, 2021. "The intergenerational impact of reduced generosity in the social safety net," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 1-24.
    3. Barbara Broadway & Tessa LoRiggio & Chris Ryan & Anna Zhu, 2022. "Literature review on the impact of welfare policy design on children and youth," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 809-840, September.
    4. de Gendre, Alexandra & Schurer, Stefanie & Zhang, Angela, 2021. "Two Decades of Welfare Reforms in Australia: How Did They Affect Single Mothers and Their Children?," IZA Discussion Papers 14752, Institute of Labor Economics (IZA).
    5. Ben Spies-Butcher & Ben Phillips & Troy Henderson, 2020. "Between universalism and targeting: Exploring policy pathways for an Australian Basic Income," The Economic and Labour Relations Review, , vol. 31(4), pages 502-523, December.

    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. Robert A. Moffitt & Brian J. Phelan & Anne E. Winkler, 2020. "Welfare Rules, Incentives, and Family Structure," Journal of Human Resources, University of Wisconsin Press, vol. 55(1), pages 1-42.
    2. repec:msl:workng:1008 is not listed on IDEAS
    3. Cygan-Rehm, Kamila & Kuehnle, Daniel & Riphahn, Regina T., 2018. "Paid parental leave and families’ living arrangements," Labour Economics, Elsevier, vol. 53(C), pages 182-197.
    4. Leturcq, Marion, 2012. "Will you civil union me? Taxation and civil unions in France," Journal of Public Economics, Elsevier, vol. 96(5), pages 541-552.
    5. Leturcq, Marion, 2012. "Will you civil union me? Taxation and civil unions in France," Journal of Public Economics, Elsevier, vol. 96(5), pages 541-552.
    6. 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.
    7. Elliott Isaac, 2020. "Marriage, Divorce, and Social Safety Net Policy," Southern Economic Journal, John Wiley & Sons, vol. 86(4), pages 1576-1612, April.
    8. Jean Knab & Irv Garfinkel & Sara McLanahan & Emily Moiduddin & Cynthia Osborne, 2008. "The Effects of Welfare and Child Support Policies on the Timing and Incidence of Marriage Following a Nonmarital Birth," Working Papers 898, Princeton University, School of Public and International Affairs, Center for Research on Child Wellbeing..
    9. Marco Francesconi & Helmut Rainer & Wilbert Klaauw, 2015. "Unintended consequences of welfare reform for children with single parents: a theoretical analysis," Review of Economics of the Household, Springer, vol. 13(3), pages 709-733, September.
    10. repec:pri:crcwel:wp07-10-ff is not listed on IDEAS
    11. Chris Herbst, 2011. "The Impact of the Earned Income Tax Credit on Marriage and Divorce: Evidence from Flow Data," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 30(1), pages 101-128, February.
    12. Maya Rossin-Slater, 2017. "Signing Up New Fathers: Do Paternity Establishment Initiatives Increase Marriage, Parental Investment, and Child Well-Being?," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 93-130, April.
    13. Anna Raute & Andrea Weber & Galina Zudenkova, 2022. "Can public policy increase paternity acknowledgment? Evidence from earnings-related parental leave," RF Berlin - CReAM Discussion Paper Series 2206, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    14. Francesconi, Marco & Van Der Klaauw, Wilbert & Rainer, Helmut, 2008. "Unintended Consequences of Welfare Reform: The Case of Divorced Parents," CEPR Discussion Papers 7107, C.E.P.R. Discussion Papers.
    15. Immervoll, Herwig & Jacobsen Kleven, Henrik & Thustrup Kreiner, Claus & Verdelin, Nicolaj, 2008. "An evaluation of the tax-transfer treatment of married couples in European countries," EUROMOD Working Papers EM7/08, EUROMOD at the Institute for Social and Economic Research.
    16. Ortigueira, Salvador & Siassi, Nawid, 2022. "Income assistance, marriage, and child poverty: An assessment of the Family Security Act," Economic Modelling, Elsevier, vol. 111(C).
    17. 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.
    18. James Alm & J. Sebastian Leguizamon & Susane Leguizamon, 2023. "Race, Ethnicity, and Taxation of the Family: The Many Shades of the Marriage Penalty/Bonus," National Tax Journal, University of Chicago Press, vol. 76(3), pages 525-560.
    19. Dan Anderberg, 2008. "Tax credits, income support, and partnership decisions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 499-526, August.
    20. Fink, Alexander, 2016. "Income taxation and the timing of marriage," VfS Annual Conference 2016 (Augsburg): Demographic Change 145827, Verein für Socialpolitik / German Economic Association.
    21. Jeffrey Grogger & LynnA. Karoly, 2009. "The Effects of Work-Conditioned Transfers on Marriage and Child Well-Being: A Review," Economic Journal, Royal Economic Society, vol. 119(535), pages 15-37, February.
    22. Katherine Michelmore, 2018. "The earned income tax credit and union formation: The impact of expected spouse earnings," Review of Economics of the Household, Springer, vol. 16(2), pages 377-406, June.

    More about this item

    Keywords

    Repartnering; lone parents; welfare reform;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

    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:syd:wpaper:2016-15. 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: Vanessa Holcombe (email available below). General contact details of provider: https://edirc.repec.org/data/deusyau.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.