Unilateral Divorce, Assortative Mating, and Household Income Inequality

Abstract

This paper studies how the introduction of unilateral divorce affects household income inequality across newly married couples and explores the potential mechanisms, in particular through assortative mating. I exploit variation in the adoption and timing of unilateral divorce laws and employ a synthetic control method. I find that unilateral divorce increases income inequality by 6.5–18%. This is likely driven by changes in the matching patterns across newly married couples—unilateral divorce moderately increases educational sorting and substantially increases income sorting. The effect is partially driven by high-income (low-income) individuals being less likely to marry down (up).

Keywords: Divorce Law, Unilateral Divorce, Marriage Market, Assortative Mating, Household Income Inequality

JEL Classification: J12, K36