Research

Working Papers

Labor Market Consequences of Less Restrictive Divorce Laws 

joint with Astrid Würtz Rasmussen, Aarhus University, and Mette Verner, VIVE, The ROCKWOOL Foundation Research Unit Study Paper No. 179, 2023 

Abstract: 

In this paper, we study the effects of introducing less restrictive divorce laws on married women’s labor supply. We focus on a reform of the Danish divorce law in 2013, which allowed for divorces with an extremely short separation period. This type of reform will probably be the next step in many countries in terms of easing the requirements for getting a divorce. Hence, it is of great importance to evaluate how this kind of reform affects the labor market choices, especially for women, as they often have a weaker connection to the labor market. Results from a difference-in-difference analysis using register data show that higher perceived risk of marital dissolution, as a consequence of overall ‘easier’ access to divorce, increases married women’s labor market attachment. Married women increase annual earnings, hourly wages, and annual hours worked, but responses are heterogeneous. Effects are larger for mothers having children not living at home anymore. Across different education groups, married women with low or intermediate education levels respond the most. We also see differential responses by income. Women in the lowest income quartile respond the least, whereas high-income women and women with high income rank compared to their partner respond the most to the reform. Hence, lowering the barriers to divorce, directly influence the labor market behavior of married women.


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