The Ant or the Grasshopper? The Long-Term Consequences of Unilateral Divorce Laws on Savings of European Households

38 Pages Posted: 21 Nov 2016

See all articles by Viola Angelini

Viola Angelini

University of Groningen - Faculty of Economics and Business; Netspar

Marco Bertoni

University of Padua

Luca Stella

Bocconi University; IZA Institute of Labor Economics

Christoph Weiss

European Union - European Investment Bank

Abstract

By allowing people to obtain divorce without the consent of their spouse, Unilateral Divorce Laws (UDLs) increase the risk of divorce. Using the staggered introduction of UDLs across European countries, we show that households exposed to UDLs for longer time accumulate more savings. This effect holds for both financial and total wealth and is stronger at higher quantiles of the wealth distribution. Longer exposure to UDLs also increases female labour market participation and financial literacy, contributing to uncover the mechanisms through which the risk of divorce may affect savings. Our results are consistent with a precautionary motive for saving.

Keywords: household savings, financial literacy, divorce

JEL Classification: G11, J12, J22, J32

Suggested Citation

Angelini, Viola and Bertoni, Marco and Stella, Luca and Weiss, Christoph, The Ant or the Grasshopper? The Long-Term Consequences of Unilateral Divorce Laws on Savings of European Households. Available at SSRN: https://ssrn.com/abstract=2872620 or http://dx.doi.org/10.2139/ssrn.2872620

Viola Angelini (Contact Author)

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Marco Bertoni

University of Padua ( email )

Luca Stella

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Christoph Weiss

European Union - European Investment Bank ( email )

98-100 Boulevard Konrad Adenauer
L-2950
Luxembourg

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