Social Security and the Timing of Divorce

22 Pages Posted: 10 Sep 2007 Last revised: 27 Jul 2022

See all articles by Gopi Shah Goda

Gopi Shah Goda

Stanford University

John B. Shoven

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Sita N. Slavov

American Enterprise Institute; Occidental College - Department of Economics

Date Written: September 2007

Abstract

Social Security provides spousal benefits in retirement to secondary workers in married couples based on the primary worker's earnings record. In addition, Social Security pays spousal benefits to divorced secondary workers whose marriages lasted at least ten years. However, if a marriage failed in less than ten years, no spousal benefits are paid. The spousal benefit is particularly valuable to secondary workers in couples where there is a large disparity in earnings between the primary worker and the secondary worker. We examine whether these couples, who have more to gain from extending their marriage to ten years, are more likely to delay divorce to the tenth year relative to a control group. We find that vulnerable couples are slightly more likely to delay divorce from year nine to year ten; however, the effect is statistically insignificant and small in magnitude. While the "cliff"-vesting of retirement benefits for divorced spouses raises equity concerns, it does not appear to distort incentives for divorce.

Suggested Citation

Goda, Gopi Shah and Shoven, John B. and Slavov, Sita N., Social Security and the Timing of Divorce (September 2007). NBER Working Paper No. w13382, Available at SSRN: https://ssrn.com/abstract=1012836

Gopi Shah Goda

Stanford University ( email )

SIEPR
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John B. Shoven (Contact Author)

Stanford University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Sita N. Slavov

American Enterprise Institute ( email )

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United States

HOME PAGE: http://www.aei.org/scholar/sita-nataraj-slavov/

Occidental College - Department of Economics ( email )

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United States

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