Marriage and Divorce: The Role of Labor Market Institutions

Arbeitspapier

Marriage and divorce decisions are influenced by the institutional environment they are made in. One example is the social insurance system, which acts as a substitute for within-household insurance against economic shocks. In this paper, we quantify the importance of household-level insurance for marriage and divorce by exploiting an exogenous increase in the need for risk sharing: in January 2003, a German labor market reform sharply reduced means-testing exemptions in the unemployment insurance system and thereby increased the extent to which spouses have to insure each other against unemployment. Using social security register data, we show that the extent to which (potential) spouses were affected by this reform varies with nationality. We then follow a differences-in-differences identification strategy and use data on all marriages and divorces in Germany between 1997 and 2013 to show that increased means testing made the formation of interethnic marriages significantly less attractive. At the same time, the reform increased the stability of newly-formed interethnic marriages.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 8508

Classification and Topics

• Classification: Wirtschaft ; Demographic Economics: General ; Marriage; Marital Dissolution; Family Structure; Domestic Abuse ; Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination ; Unemployment: Models, Duration, Incidence, and Job Search ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: marriage ; divorce ; interethnic marriage ; risk sharing ; unemployment insurance ; labor market reforms ; EU expansion

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schulz, Bastian ; Siuda, Fabian
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/223580
• Last update: 10.03.2025, 11:44 AM CET