Working Paper No. 13-12

Divorce Spillover Effects: The Effects of Marriage Market Participation on Future Divorce Rates
Sheena Murray
November 2013

ABSTRACT

Theoretical models have predicted that marriage markets are highly sensitive to exogenous shocks in the pool of available singles. Some models predict that an increase in the pool of singles positively impacts divorce rates by decreasing search costs and increasing the probability of remarriage. Despite the growing collection of theoretical literature on this issue, empirical work on the subject has been extremely limited. Historically, natural experiments that generate increases in the pool of available spouses (for example divorce law liberalization) tend to impact divorce rates directly, making the separate effects difficult to identify. This paper contributes to the literature by using an innovative approach that provides an explicit empirical test of how fluctuations in the availability of marriage market participants affect divorce rates. I focus my analysis on border regions of each state and assess the impact of fluctuations in divorcee population in one state on the divorce rates of those in the neighboring states' border regions. Specifically, I test if state border counties are more affected than interior counties by the divorce rates of a neighboring state's border region. By utilizing cross-state border regions, I am able to identify the impact of increased singles in one state on the divorce rates of the border counties of a neighboring state, while controlling for
resident state divorce laws and labor market conditions. Despite the average effect being close to zero, I find a pattern of coefficients that strongly supports a divorce spillover effect. The relationship between population levels and spillover magnitudes is strongly predicted by the theoretical literature. The divorce rates of a state's border counties disproportionally increase in comparison to its interior regions, after a spike in the divorce rate of a neighboring state's border region, when the neighboring state's border population exceeds one's own state border population. The findings are robust to a number of specification alternatives and provide strong evidence that increased marriage market participants result in higher divorce rates.

 

JEL classification: J10, J12
Keywords: Marriage, Divorce, Matching, Divorce Law

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