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For Better or for Worse, But How About a Recession?

32 Pages Posted: 14 Nov 2010  

Jeremy Arkes

RAND Corporation

Yu-Chu Shen

U.S. Graduate School of Business and Public Policy; National Bureau of Economic Research (NBER)

Date Written: November 2010

Abstract

In light of the current economic crisis, we estimate hazard models of divorce to determine how state and national unemployment rates affect the likelihood of divorce. With 89,340 observations over the 1978-2006 period for 7633 couples from the 1979 NLSY, we find mixed evidence on whether increases in the unemployment rate lead to overall increases in the likelihood of divorce, which would suggest countercyclical divorce probabilities. However, further analysis reveals that the weak evidence is due to the weak economy increasing the risk of divorce only for couples in years 6 to 10 of marriage. For couples in years 1 to 5 and couples married longer than 10 years, there is no evidence of a pattern between the strength of the economy and divorce probabilities. The estimates are generally stronger in magnitude when using national instead of state unemployment rates.

Suggested Citation

Arkes, Jeremy and Shen, Yu-Chu, For Better or for Worse, But How About a Recession? (November 2010). NBER Working Paper No. w16525. Available at SSRN: https://ssrn.com/abstract=1708767

Jeremy Arkes (Contact Author)

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Yu-Chu Shen

U.S. Graduate School of Business and Public Policy ( email )

555 Dyer Road
Monterey, CA 93943
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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