Unlucky at work, unlucky in love: job loss and marital stability

Abstract

This paper analyses the relationship between a husband’s job loss and marital stability, focusing on involuntary employment terminations due to plant closures or dismissals. Using discrete survival analysis techniques on data from the German Socio-Economic Panel, we find plant closures and dismissals to be associated with a 54 and 74% higher risk of marital dissolution respectively, though the strength of association varies significantly by how long ago the change in employment status occurred. We extend the previous literature by considering heterogeneity in the relationship depending on whether new employment was found. Our analysis shows that the dissolution risk remains elevated even in couples where the husband has taken up a new position. Surprisingly, the relative risk of dissolution following the first period in a new job after a job loss is about the same as the relative risk of dissolution following the first period without employment. The relationship between finding a new job and marital dissolution appears to be mediated by changes in working hours as well as wages. In two extensions, we also consider the role of the wife’s employment status in moderating the relationship and show that a wife’s job loss is not associated with a similar increase in the probability of divorce as a husband’s.

Women’s Labor Market Responses to Their Partners’ Unemployment and Low-Pay Employment

“…In this case, the added worker effects estimated in this study may yield a biased representation of the effect for the entire population (Charles and Stephens 2004). Also using the SOEP data, Keldenich and Luecke (2020) find that the husband's employment termination is indeed associated with an increase in the probability of divorce. However, when the husband is dismissed from his job, the relative risk of divorce will be lower if the woman takes up a new job instead of remaining unemployed (while there is no significant difference for other types of job losses).…”

Firm Relocations, Commuting and Relationship Stability

“…The authors also test whether working in a firm before closing increases the divorce rate and find that it does not. Keldenich and Lücke (2018) use the German Socioeconomic Panel (SOEP) from 1984 to 2015. 5 They use involuntary job loss as a source of variation, including firm closures.…”

Integrating healthy marriage and relationship education into an employment program

“…Economic circumstances also influence relationships for married couples. For example, many studies show that married couples are more likely to get divorced when one partner loses their job (Charles & Stephens, 2004; Keldenich & Luecke, 2022).…”