Booms, Busts, and Divorce

Abstract

For almost a century, anecdotes have suggested that divorce rates decline during recessions. However, until very recently there has been surprisingly little formal empirical evidence on whether such a link exists, let alone its magnitude if it does. Moreover, the anticipated direction of the effect is ambiguous theoretically. Although previous studies have concluded that individual job loss destabilizes marriages, macroeconomic conditions may affect divorce probabilities even for those not directly experiencing a job shock. We add to the few existing contemporaneous studies of the effects of macroeconomic shocks on divorce by conducting an empirical analysis of the relationship between state-level unemployment rates and state-level divorce rates using vital statistics data on divorces in the United States from 1976–2009. We find a significant and robust negative relationship between the unemployment and divorce rates, whereby a one percentage point rise in the unemployment rate is associated with a decrease of 0.043 divorces per one thousand people, or about a one percent fall in the divorce rate. The result that divorce is pro-cyclical is robust to a host of alternative empirical specifications, to disaggregating by state characteristics and time period, to expanding the unemployment series back to 1970, and to using alternative measures of local economic conditions.

What Effects Do Macroeconomic Conditions Have on Families’ Time Together?

“…Other recent studies find a decline in divorce rates during periods of higher unemployment (Amato and Beattie, 2011;Hellerstein and Morrill, 2011;Schaller, 2012).…”

Divorce and the business cycle: a cross-country analysis

“…We add lags from 1 to 2 years because there can be a lag between the divorce decision and the date of the divorce, depending, for example, on the separation period requirements. 20 The estimated coefficients are reported in Table 9. In column (1), we only observe an inverse relationship between the contemporaneous unemployment rate and the divorce rate.…”

“…2 We are not the first researchers to study the relationship between fluctuations in the business cycle and divorce. However, most of the (somewhat sparse) economic literature examining the relationship between the business cycle and divorce has focused on the US (Amato and Beattie, 2011;Baghestani and Malcolm, 2014;Hellerstein and Morrill, 2011;Schaller, 2013). Fewer studies have investigated this issue in other countries, but some examples include the papers published by Jensen and Smith (1990) for Denmark, Fischer and Liefbroer (2006) for the Netherlands, and Ariizumi et al (2015) for Canada.…”

Regional Unemployment, Marriage, and Divorce

“…Early studies conclude that both marriage and divorce rates are pro-cyclical (Ogburn and Thomas, 1922;Stouffer and Spencer, 1936; Kirk and Thomas, 1960;Silver, 1965). More recent works, using state-level data, or individual-level data for the US, also find a negative effect of economic recession on divorce rates (Amato and Beattie, Hellerstein and Morrill, 2011;Hellerstein et al, 2013;Schaller, 2013; Baghestani and Malcolm, 2014) and on marriage rates (Schaller, 2013). As an exception, South (1985) detects a small positive relationship between the unemployment rate and the divorce rate, using US national-level data.…”

“…In this paper, we examine how marriage and divorce in Spain change in response to the economic environment. Most of the scarce economic literature studying the impact of business cycles on marriage and divorce has focused on the US case, generally finding a negative effect of unemployment rates on both outcomes (Amato and Beattie, 2011; Hellerstein and Morrill, 2011;Schaller, 2013). Less work has been done on the analysis of this issue for other countries; as an exception, we find the studies by Fischer and Liefbroer (2006) examining the Netherlands case, Jensen and Smith (1990) for Denmark, and Ariizumi et al (2015) for Canada.…”