Free to Leave? A Welfare Analysis of Divorce Regimes

Raquel Fernandez and Joyce Cheng Wong

No 20251, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: During the 1970s the US underwent an important change in its divorce laws, switching from mutual consent to a unilateral divorce regime. Who benefitted and who lost from this change? To answer this question we develop a dynamic life-cycle model in which agents make consumption, saving, labor force participation (LFP), and marriage and divorce decisions subject to several shocks and given a particular divorce regime. We calibrate the model using statistics relevant to the life-cycle of the 1940 cohort. Conditioning solely on gender, our ex ante welfare analysis finds that women would fare better under mutual consent whereas men would prefer a unilateral system. Once we condition not only on gender but also on initial productivity, we find that men in the top three quintiles of the initial productivity distribution are made better off by a unilateral system as are the top two quintiles of women; the rest prefer mutual consent. We also find that although the change in divorce regime had only a small effect on the LFP of married women in the 1940 cohort, these effects would be considerably larger for a cohort who lived its entire life under a unilateral divorce system.

JEL-codes: J12 J16 K36 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-dem, nep-dge, nep-law and nep-ltv
Note: EFG POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Raquel Fernández & Joyce Cheng Wong, 2017. "Free to Leave? A Welfare Analysis of Divorce Regimes," American Economic Journal: Macroeconomics, vol 9(3), pages 72-115.

Downloads: (external link)
http://www.nber.org/papers/w20251.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:20251

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w20251

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().