Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results

28 Pages Posted: 12 Sep 2003

See all articles by Justin Wolfers

Justin Wolfers

University of Michigan at Ann Arbor - Department of Economics; University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; The University of Sydney - Discipline of Economics; Brookings Institution - Economic Studies Program; Peterson Institute for International Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Kiel Institute for the World Economy

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Date Written: August 2003

Abstract

Application of the Coase Theorem to marital bargaining suggests that shifting from a consent divorce regime to no-fault unilateral divorce laws should not affect divorce rates. Each iteration of the empirical literature examining the evolution of divorce rates across U.S. states has yielded different conclusions about the effects of divorce law liberalization. I show that these results reflect a failure to jointly consider both the political endogeneity of these divorce laws and the dynamic response of divorce rates to a shock to the political regime. Taking explicit account of the dynamic response of divorce rates to the policy shock, I find that liberalized divorce laws caused a discernible rise in divorce rates for about a decade, but this increase was substantially reversed over the next decade. That said, this increase explains very little of the rise in the divorce rate over the past half century. Both administrative data on the flow of new divorces, and measures of the stock of divorcees from the census support this conclusion. These results are suggestive of spouses bargaining within marriage, with an eye to their partner's divorce threat.

Keywords: divorce rates, family law, unilateral divorce, no-fault divorce, state-specific trends, differences-in-differences, Coase theorem

Suggested Citation

Wolfers, Justin, Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results (August 2003). Available at SSRN: https://ssrn.com/abstract=444620 or http://dx.doi.org/10.2139/ssrn.444620

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