Gaëlle Simard-Duplain, HEC Montreal October 29, 2019

Posted on 2019-10-24 in Events, Upcoming Seminars
Oct 29, 2019



Title: The effect of divorce on women's labour supply: A life-cycle perspective


Abstract: In this paper, I develop and estimate a model of life-cycle labour supply that incorporates the role of divorce. To do so, I set a collective model of household decision-making in an intertemporal context. The reduced-form literature has produced contradictory results on the effect of divorce and divorce risk on women’s labour decisions. My model provides a unifying framework within which to view these findings. It also contributes to the structural literature, which has mostly studied how divorce alters bargaining power in marriage, and ignored women’s insurance response to the risk of dissolution. I find that divorce risk shifts the lifetime expected income of married women, thus changing their labour in all periods. However, this effect is mitigated over time, as women stay in and learn about their marriage. Among women who do experience divorce, the event exacerbates pre-existing differences across marriages.

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