Female labor supply and divorce: new evidence from Ireland

Bargain, Olivier, González, Libertad, Keane, Claire and Özcan, Berkay ORCID: 0000-0003-2255-9406 (2010) Female labor supply and divorce: new evidence from Ireland. Discussion Paper Series (4959). Institute for the Study of Labor (IZA), Bonn, Germany.

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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.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://www.iza.org/en/webcontent/index_html
Additional Information:	© 2010 The Authors
Divisions:	Social Policy
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HQ The family. Marriage. Woman
JEL classification:	D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General D - Microeconomics > D1 - Household Behavior and Family Economics > D13 - Household Production and Intrahousehold Allocation J - Labor and Demographic Economics > J1 - Demographic Economics > J12 - Marriage; Marital Dissolution; Family Structure J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J22 - Time Allocation and Labor Supply
Date Deposited:	27 Sep 2011 12:53
Last Modified:	11 Dec 2024 19:02
URI:	http://eprints.lse.ac.uk/id/eprint/38465

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