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The Effect of Changing Financial Incentives of Repartnering

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  • 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
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Repartnering; lone parents; welfare reform;

    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

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