Stable Income, Stable Family

Weathering the storm together: Does unemployment insurance help couples avoid divorce?

“…The increase in divorce was largely concentrated among poor households, with upper income households unaffected. Unlike Lindo et al (2020), we also found substantial effects of benefit generosity on divorce rates of unemployed women. Slightly higher average effects for men are explained by men’s higher relative contribution to household income before job loss.…”

“…Although there is literature showing unemployment insurance generosity impacts health and that unemployment causes divorce (e.g. Di Nallo et al, 2022 ; Kuka, 2020 ), there is only one study examining unemployment insurance and divorce ( Lindo et al, 2020 ). Further, from the social policy literature, we know that social programme generosity is associated with family stability, but these studies have not examined how unemployment insurance, the most important social safety net for the working age population, affects divorce.…”

“…In contrast, the literature on the effects of unemployment benefits has paid little attention to outcomes such as health ( Kuka, 2020 ; Shahidi and Parnia, 2021 ) and subjective wellbeing ( Carr and Chung, 2014 ; Rose, 2019 ; Wulfgramm, 2014 ). With respect to families, there is just one study examining divorce and fertility ( Lindo et al, 2020 ). From the comparative social policy literature we know that other welfare state programmes impact family stability ( Bitler et al, 2004 ; Halla et al, 2016 ; Van Winkle, 2020 ), suggesting a likely, though insufficiently explored, relationship between unemployment insurance and divorce.…”

“…Our study offers key improvements over the literature on the positive effects of unemployment insurance and the literature on social policy and family stability. First, Lindo et al (2020) , the only other study on the effects of unemployment benefits on divorce, examine the effect of changes in unemployment benefit generosity on divorce in the US, but compare changes in divorce among the unemployed to those without unemployment spells, a comparison that could be biased given different trends in family formation and dissolution by social strata ( Cherlin, 2020 ). Second, a number of studies from the social policy literature examine policy changes that include simultaneous variations on multiple policy dimensions (for example, generosity and activation requirements) ( Bitler et al, 2004 ; Halla et al, 2016 ; Van Winkle, 2020 ).…”

“… Boertien (2012) finds that income from lottery wins increases relationship satisfaction and reduces the chances of separation, but only if the male partner won. Similarly, Lindo et al (2020) showed that divorce rates of unemployed men decrease with increased unemployment benefit generosity, but not those of unemployed women.…”