Unemployment, Splitting Up and Spousal Income Replacement

William Nilsson ()
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William Nilsson: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 651, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: In this study, the consequences of unemployment for a Swedish sample of couples are analyzed. The purpose is to estimate the possible income replacement that a spouse can provide. Unemployment can also affect the probability that the couples split up. Since not all couples remain in the analysis, a potential selection problem can occur. To deal with this problem, and also to take care of unobserved heterogeneity, a sample selection model for panel data is estimated. The results indicate that it is necessary to take into account the selection problem. A period in unemployment is found to be correlated with a higher female income only in the case of men who earned a fairly high income before becoming unemployed. Women who earned a fairly low income and were subject to a long period of unemployment are found to be compensated by a higher male income.

Keywords: unemployment; divorce; spousal response; sample selection; panel data (search for similar items in EconPapers)
JEL-codes: C33 J12 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm
Date: 2005-04-08
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