Yours, Mine and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?
University of Chicago
February 18, 2012
This paper examines how divorce laws affect couples' intertemporal choices and wellbeing. Exploiting panel variation in U.S. laws, I estimate the parameters of a model of household decision making. Household survey data indicate that the introduction of unilateral divorce in states that imposed an equal division of property is associated with higher household savings and lower female employment, implying a distortion in household assets accumulation and a transfer towards wives whose share in household resources is smaller than their husband's share. When spouses share consumption equally, separate property or prenuptial agreements can reduce distortions and increase equity.
Number of Pages in PDF File: 51
Keywords: household savings, divorce laws, intra-household allocation
JEL Classification: J12, D91, D13working papers series
Date posted: February 19, 2012 ; Last revised: February 20, 2012
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