Financial implications of relationship breakdown: Does marriage matter?
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In raw data in the UK, the income loss on separation for women who were cohabiting is less than the loss for those who were married. Cohabitants lose less even after controlling for observable characteristics including age and the number of children. This difference is not explained by differences in access to benefits or labor supply responses after separation. In contrast, there is no difference in the change in household income experienced by cohabiting and married men who do better on average than both groups of women. We show that the difference for women arises because of differences in the use of family support networks: cohabitants’ standard of living falls by less because they are more likely to live with other adults, particularly their family, following separation, even after controlling for age and children. Divorced women do not return to living with their extended families. The greater legal protection offered by marriage does not appear to translate into economic protection.
KeywordsDivorce Cohabitation Income loss
JEL ClassificationD10 J12
We thank Tom Crossley, Shoshana Grossbard, Pramila Krishnan, Jo Miles and two anonymous referees for helpful comments. Fisher acknowledges the support of the Australian Research Council Discovery Project (DP150101718) and Australian Research Council Centre of Excellence for Children and Families over the Life Course (CE140100027). The Centre is administered by the Institute for Social Science Research at The University of Queensland, with nodes at The University of Western Australia, The University of Melbourne and The University of Sydney. The views expressed in this paper are not necessarily those of the Australian Research Council. Low thanks funding from the ESRC as a Research Fellow, grant number RES-063-27-0211.
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