Working Paper: NBER ID: w10014
Authors: Justin Wolfers
Abstract: Application of the Coase Theorem to marital bargaining suggests that shifting from a consent divorce regime to no-fault unilateral divorce laws should not affect divorce rates. Each iteration of the empirical literature examining the evolution of divorce rates across US states has yielded different conclusions about the effects of divorce law liberalization. I show that these results reflect a failure to jointly consider both the political endogeneity of these divorce laws and the dynamic response of divorce rates to a shock to the political regime. Taking explicit account of the dynamic response of divorce rates to the policy shock, I find that liberalized divorce laws caused a discernible rise in divorce rates for about a decade, but that this increase was substantially reversed over the next decade. That said, this increase explains very little of the rise in the divorce rate over the past half century. Both administrative data on the flow of new divorces, and measures of the stock of divorcees from the census support this conclusion. These results are suggestive of spouses bargaining within marriage, with an eye to their partner's divorce threat.
Keywords: No keywords provided
JEL Codes: J12; J16; J18; I3; J1; K3; C23; D13; D23; N32; R2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unilateral divorce laws (K36) | divorce rates (J12) |
| divorce rates (initial increase) (J12) | divorce rates (long-term lower rates) (J12) |
| unilateral divorce laws (K36) | divorce rates (short-term increase) (J12) |
| unilateral divorce laws (K36) | divorce rates (peak after 10 years) (J12) |
| unilateral divorce laws (K36) | divorce rates (reversal after 15 years) (J12) |