29.5.12

LIFE IMITATES PRELIMS.

What is the effect of no-fault divorce on the labor-force participation rates of married women?

Commitments are not as credible, and paid work is insurance.
Researchers believe it’s because marriage provides “implicit social insurance” for women, who are still more likely to be the secondary income-earners in the U.S. and Europe. So in the U.S., where divorce rates are higher, “women have a higher incentive to obtain work experience in case they find themselves alone in the future,” they write. “European women anticipate not getting divorced as often and hence find less reason to insure themselves by working as much as American women.”
The substitution effect of lower marginal tax rates offsets the income effect for men.

With diagrams.  Via Andrew Sullivan.

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