The Effect of Changing Financial Incentives on Repartnering

53 Pages Posted: 28 Sep 2016

See all articles by Hayley Fisher

Hayley Fisher

The University of Sydney

Anna Zhu

RMIT University

Date Written: September 28, 2016

Abstract

This paper examines how a reduction in the financial resources available to lone parents affects repartnering. We exploit an Australian natural experiment that reduced the financial resources available to a subset of separating parents. Using bi-weekly administrative data capturing separations occurring among low and middle income couples, we show that the policy reform significantly increased the repartnering hazard for affected separating mothers, especially those with low labour force attachment. Reconciliation with the woman’s prior partner drives this result. Complementary analysis of an annual panel survey demonstrates that repartnering impacts are also present over the five years post-separation and that the impact on repartnering hazards is increasing in the extent of financial loss and the urgency of the impact. Together, these results demonstrate that one way that lone mothers respond to a reduction in financial resources available at the time of relationship breakdown is by repartnering more quickly.

Keywords: Repartnering, lone parents, welfare reform

JEL Classification: J12, J18, H53

Suggested Citation

Fisher, Hayley and Zhu, Anna, The Effect of Changing Financial Incentives on Repartnering (September 28, 2016). Melbourne Institute Working Paper No. 29/16, Available at SSRN: https://ssrn.com/abstract=2844520 or http://dx.doi.org/10.2139/ssrn.2844520

Hayley Fisher

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Anna Zhu (Contact Author)

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

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