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Title: Divorce Laws and Divorce Rate in the U.S.

Citation Type: Working Paper

Publication Year: 2009

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Abstract: At the end of the 1960s, the U.S. divorce laws underwent major changes and thedivorce rate more than doubled in all of the states. The new laws introduced uni-lateral divorce in most of the states, and changes in divorce settlements, such asproperty division and child custody assignments in every state. Empirical literaturehas focused on the switch from consensual to unilateral divorce and found that thischange cannot fully account for the increase in the divorce rate. What previous lit-erature has ignored is other aspects of the legal change, and their e ect on divorcerate in states where the decision remained consensual. In this paper I show thatchanges in divorce settlements provide economic incentives for both spouses to agreeon divorcing. I solve and calibrate a model where agents di er by gender, and wages,and make marital status, investment, and labor supply decisions. Under the new nancial settlements, divorced men gain from a favorable division of property, whilewomen gain from an increase in joint child custody assignments. Since both of themare better o in the new divorce setting, the requirement of consent for divorce isnot longer necessary. Results show that changes in divorce settlements account for a substantial amount of the increase in the divorce rate in both the unilateral andthe consensual regime. I also nd that the increase in divorce rate of young coupleswith children contributes the most in the overall increase, and this is consistent withthe data.

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Authors: Marcassa, Stefania

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Publication Number: 2009-52

Institution: Paris School of Economics

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Publisher Location: Paris, France

Data Collections: IPUMS CPS

Topics: Family and Marriage

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