WP#2004-9

Abstract

This paper investigates the effects of economic incentives on divorce and remarriage behavior. Before December 1977, the Social Security law entitled divorcees to claim auxiliary benefits on their ex-spouse’s record only if the marriage lasted at least 20 years. One of the 1977 amendments of the Social Security rules shortened the minimum duration of an “eligible” marriage to ten years. Following the passage of the law, we find that the divorce rate at nine years of marriage decreased relative to a control group. However, there is not strong evidence of a corresponding increase in the divorce rate at ten years of marriage. We also find no evidence that the new claim on future Social Security benefits affected divorced women’s remarriage probability in the predicted way.

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