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Female labor supply and divorce : new evidence from Ireland

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Abstract

If participation in the labor market helps to secure women's outside options in the case of divorce/separation, an increase in the perceived risk of marital dissolution may accelerate the increase in female labor supply. This simple prediction has been tested in the literature using time and/or spatial variation in divorce legislation (e.g., across US states), leading to mixed results. In this paper, we suggest testing this hypothesis by exploiting a more radical policy change, i.e., the legalization of divorce. In Ireland, the right to divorce was introduced in 1996, followed by an acceleration of marriage breakdown rates. We use this fundamental change in the Irish society as a natural experiment. We follow a difference-in-difference approach, using families for whom the dissolution risk is small as a control group. Our results suggest that the legalization of divorce contributed to a significant increase in female labor supply, mostly at the extensive margin. Results are not driven by selection and are robust to several specification checks, including the introduction of household fixed effects and an improved match between control and treatment groups using propensity score reweighting.

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  • Olivier Bargain & Claire Keane, 2010. "Female labor supply and divorce : new evidence from Ireland," Working Papers 201031, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:201031
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    File URL: http://hdl.handle.net/10197/2665
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    Cited by:

    1. repec:ucp:jlawec:doi:10.1086/692806 is not listed on IDEAS
    2. Lundborg, Petter & Plug, Erik & Rasmussen, Astrid Würtz, 2014. "Fertility Effects on Female Labor Supply: IV Evidence from IVF Treatments," IZA Discussion Papers 8609, Institute for the Study of Labor (IZA).
    3. Libertad Gonzalez, 2014. "Should divorce be easier or harder?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 113-113, December.
    4. Jennifer Roff, 2017. "Cleaning in the Shadow of the Law? Bargaining, Marital Investment, and the Impact of Divorce Law on Husbands' Intrahousehold Work," Journal of Law and Economics, University of Chicago Press, vol. 60(1), pages 115-134.
    5. World Bank, 2013. "Montenegro Gender Diagnostic," World Bank Other Operational Studies 21827, The World Bank.
    6. Maczulskij, Terhi & Böckerman, Petri, 2017. "Harsh Times: Do Stressors Lead to Labor Market Losses?," IZA Discussion Papers 10773, Institute for the Study of Labor (IZA).
    7. repec:aea:aecrev:v:107:y:2017:i:6:p:1611-37 is not listed on IDEAS
    8. Petter Lundborg & Erik Plug & Astrid Würtz Rasmussen, 2017. "Can Women Have Children and a Career? IV Evidence from IVF Treatments," American Economic Review, American Economic Association, vol. 107(6), pages 1611-1637, June.
    9. Libertad González & Berkay Özcan, 2013. "The Risk of Divorce and Household Saving Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 48(2), pages 404-434.
    10. Alessandro Cigno, 2011. "The Economics of Marriage," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 28-41, May.
    11. Dario Sansone, 2018. "Pink Work: Same-Sex Marriage, Employment and Discrimination," 2018 Papers psa1336, Job Market Papers.
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    13. Matias Busso & Dario Romero Fonseca, 2015. "Female Labor Force Participation in Latin America: Patterns and Explanations," CEDLAS, Working Papers 0187, CEDLAS, Universidad Nacional de La Plata.

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    Keywords

    Divorce law; Natural experiment; Labor supply; Fixed effects; Propensity score; Labor supply--Ireland--Mathematical models; Women--Employment--Ireland; Divorce--Law and legislation--Ireland;

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D10 - Microeconomics - - Household Behavior - - - General
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law

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