Bedard, Kelly, and Olivier Deschênes. 2005. "Sex Preferences, Marital Dissolution, and the Economic Status of Women." Journal of Human Resources 40(2): 411-434.

The rise in the divorce rate over the past 40 years is one of the fundamental changes in American society. A substantial number of women and children now spend some fraction of their life in single female-headed households, leading many to be concerned about their economic circumstances. Estimating the cause-to-effect relationship between marital dissolution and female economic status is complicated because the same factors that increase marital instability also may affect the economic status and labor market outcomes of women. We propose an instrumental variables solution to this problem based on the sex of the firstborn child. This strategy exploits the fact that the sex of the firstborn child is random and the fact that marriages are less likely to continue following the birth of girls as opposed to boys. Our IV results cast doubt on the widely held view that divorce causes large declines in economic status for women. Once the negative selection into divorce is accounted for, our results show that, on average, ever-divorced women live in households with more income per person than never-divorced women.

Kelly Bedard and Olivier Deschênes are assistant professors of economics at the University of California, Santa Barbara. The data used in this article can be obtained beginning October 2005 through September 2008 from Kelly Bedard, Department of Economics, University of California, Santa Barbara, CA 93106-9210. The authors thank Joshua Angrist, David Card, Peter Kuhn, Doug Steigerwald, and Cathy Weinberger for their suggestions.