Loss of Marital Gains from the Division of Labor and Divorce

• In Event: Taxation of Households

Abstract

We examine the impact of Japan's pension reform on divorce. At the time of the reform, many Japanese couples followed a traditional division of labor, not only during their younger years but also into old age: the primary earner generated income through pension benefits, while the dependent spouse contributed through household work. The reform allowed dependent spouses to claim half of the primary earner's pension contributions during the marriage upon divorce. Thus, dependent spouses could secure the gains from the division of labor without maintaining marital relationships. Using the reform as a natural experiment, we test the hypothesis that the reduction in marital gains increased the likelihood of divorce. Our analysis reveals that among couples experiencing the largest reduction in these gains, divorce incidents rose by 10 to 20% in a few years after the reform. This finding highlights the importance of marital gains from the division of labor in shaping divorce decisions.

Authors

• Junya Hamaaki, hamaaki@hosei.ac.jp

• Yoshitomo Ogawa, Kwansei Gakuin University