Ananat, Elizabeth O., and Guy Michaels. 2008. “The Effect of Marital Breakup on the Income Distribution of Women with Children.” Journal of Human Resources 43(3): 611–629.
Having a female first-born child significantly increases the probability that a woman’s first marriage breaks up. Using this exogenous variation, recent work finds that divorce has little effect on women’s mean household income. We further investigate the effect of divorce using Quantile Treatment Effect methodology and find that it increases women’s odds of having very high or very low income. In other words, while some women successfully compensate for lost spousal earnings through child support, welfare, combining households, and increasing labor supply, others are markedly unsuccessful. We conclude that by raising both poverty and inequality, divorce has important welfare consequences.
Elizabeth O. Ananat is an assistant professor of public policy at the Sanford Institute of Public Policy, Duke University, and a researcher at the National Bureau of Economic Research. Guy Michaels is a lecturer in the economics department and a researcher at the Centre for Economic Performance, London School of Economics, and a researcher at the Centre for Economic Policy Research. The authors thank Daron Acemoglu, Joshua Angrist, David Autor, and Jon Gruber. We also thank Alberto Abadie, Emek Basker, Joanna Lahey, Victor Lavy, Gerard Padro-i-Miquel, Ebonya Washington, Yoram Weiss, and participants at the labor economics and public economics workshops at MIT and the NBER Children’s meetings. Erin Harrison provided helpful research assistance. The data used in this article can be obtained beginning January 2009 through December 2012 from Guy Michaels, CEP, LSE, London WC2A 2AE, UK, g.michaels@lse.ac.uk.