The Importance of Credible Commitments in Marriage: The Effect of Recognizing Homemakers’ Contribution in Property Division at Divorce in Law on Marital Formation and Dissolution

Ho-Po Crystal Wong
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Ho-Po Crystal Wong: West Virginia University, College of Business and Economics

No 14-32, Working Papers from Department of Economics, West Virginia University

Abstract: The unilateral divorce reform in the 1970's has been accompanied by a secular decline in marriage. This paper investigates how the homemaking provision in divorce law that gives recognition to homemakers' contribution during marriage in divorce property division affects marital formation and dissolution. Hypothetically the provision enhances the commitment to homemakers in marriage, which would increase the incentives to form marriage as it encourages spousal co-operation in time-allocation and marriage-specific investment. I find evidence that the homemaking provision stimulates marriage using both state and individual level data. The law also lowers divorce risk for individuals married prior to the reform by at least 9.7 percent.

Keywords: credible commitments; divorce law; divorce; homemakers; marriage; property rights; unilateral divorce (search for similar items in EconPapers)
JEL-codes: D13 J12 J2 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2014-12
New Economics Papers: this item is included in nep-law
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