The Heterogeneous Effect of Job Loss on Union Dissolution. Evidence From Germany, Britain and Switzerland

• In Event: 3523 - Family Section Refereed Roundtables
  In Refereed Roundtable (60 min): Table 3: Divorce/Relationship Dissolution

Abstract

How does unemployment affect the risk of separation? Job loss may decrease the risk if the main benefit from being in a couple is insurance against negative earning shocks. In contrast, the risk of separation increases if unemployment produces stress that reduces the quality of couple relations. Alternatively, the effect of job loss on couple stability may not be homogeneous, but vary for different income groups. We examine this question and analyze how unemployment affects the risk of separation in Germany, the UK and Switzerland. The use of long-running household panels (SOEP, BHPS, UKHLS, SHP) allows us to observe heterosexual couples one year before and three years after an unemployment spell. By combining fixed-effects regressions with a matching method, we obtain a control group of couples who do not experience unemployment, but are similar otherwise. Our results show for both countries that the separation rate after an unemployment spell doubles in the first two years after job loss, increasing from 2 to 4 percent, and remains higher than for the control group for the following two years. The effect of separation does not vary when men or women lose their job, in Germany and the UK. In neither countries, couples in low-income households face a higher extra-risk of union dissolution after an unemployment spell than middle and high-income couples.

Authors

• Alessandro Di Nallo, Université de Lausanne

• Daniel Oesch, Université de Lausanne

• Oliver Lipps, Université de Lausanne

• Marieke Voorpostel, FORS