Employment, Income and Divorce – What Can We Learn from Causal Analysis?
Daniel Brüggmann, Hertie School of Governance
Results, for all West German women in the sample, show that a divorce significantly encourages women to participate in the labor market. The preferred type of employment is thereby regular employment (employment with social security contribution) as opposed to marginal employment. The increase in employment rates leads to an increase in the average income following divorce. Nevertheless, once we control for labor market participation, as is necessary since income is only observed for those in the labor market, we do not find evidence that divorced women work or earn more than employed married women.
We are also able to identify strong heterogeneous effects among divorced women. West German women with no labor market participation in the five years prior union dissolution respond stronger to divorce than women with labor market participation prior dissolution.
Our results are derived from weighted Difference-in-Difference estimations and were scrutinized by robustness checks for variations in covariates and sensitivity analyses for deviations from underlying model assumptions.
Presented in Poster Session 2