The Economic Consequences of Unilateral Divorce for Children

Abstract

This paper provides new evidence on the economic consequences of unilateral divorce laws on the future labor market outcomes of children. Using a cohort of young adults from the 1990 census, we examine the effect of living in a unilateral divorce state as a child on education, earnings, and marital status. Women with many years of childhood exposure to unilateral divorce laws have lower wages and have completed less schooling. However, there is no statistically significant effect of unilateral divorce exposure on men's wages. Both women and men are more likely to marry and less likely to get divorced with more years of exposure to unilateral divorce as a child. We also explore alternative mechanisms through which unilateral divorce laws can affect children's outcomes. The evidence suggests that while divorce rates did increase significantly as a result of the laws, bargaining power within the household is also an important factor driving our results.

Keywords: divorce, children, family economics

JEL Classification: J12, J13