Risk of Divorce and Labor Supply Behavior of Women and Men

Berkay Ozcan, Yale University
Libertad Gonzalez, Columbia University

This paper investigates the effect of an increase in the divorce risk on the labour supply behaviour of men and women. Previous literature has frequently used the gradual introduction of the unilateral divorce law across different states of the U.S. to account for exogenous increase in the risk of divorce. In this paper we discuss that the legalization of divorce in Ireland in 1996, constitutes a better source of exogenous divorce risk. Then, we follow the labour supply behaviour of individuals who were married before the law passed. We apply a differences-in-differences approach where we use as comparison groups either married individuals in other European countries (who are not affected by the law) or married Irish people who were not affected by the increase in the risk of divorce caused by the law (for example very religious individuals).