Married Women’s Labor Force Participation as Divorce Insurance

Written By: Catherine Phillips Montalto

If married women view participation in the labor force as providing insurance against the negative economic consequences of divorce, then married women with higher expectations of divorce will be more likely to be employed. The Panel Study of Income Dynamics, 1968-1983, is used to estimate the effect of the expectation of divorce on the labor force participation decision of married women. The longitudinal nature of the data is used to estimate the probability of divorce for each married woman in the sample. Labor force participation is then modelled as dependent on the individual’s expectation of future divorce. The empirical results confirm that expectation of divorce increases labor force participation of married women. Key Words: insurance, divorce, labor force

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