Female Labor Supply and Divorce: New Evidence from Ireland

Olivier Bargain, Libertad Gonzalez, Claire Keane () and Berkay Özcan ()

No 4959, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: divorce law; natural experiment; labor supply; fixed effects; propensity score (search for similar items in EconPapers)
JEL-codes: D10 D13 J12 J22 K36 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-05
New Economics Papers: this item is included in nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: European Economic Review, 2012, 56 (8), 1675–1691

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Related works:
Journal Article: Female labor supply and divorce: New evidence from Ireland (2012)
Working Paper: Female labor supply and divorce: new evidence from Ireland (2010)
Working Paper: Female Labour Supply and Divorce: New Evidence from Ireland (2010)
Working Paper: Female labor supply and divorce: new evidence from Ireland (2010)
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