NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Divorce Risk, Wages, and Working Wives: A Quantitative Life-Cycle Analysis of Female Labor Force Participation

Raquel Fernández, Joyce C. Wong

NBER Working Paper No. 19869
Issued in January 2014
NBER Program(s):   EFG   LS   PE   POL

This paper develops a quantitative life-cycle model to study the increase in married women's labor force participation (LFP). We calibrate the model to match key life-cycle statistics for the 1935 cohort and use it to assess the changed environment faced by the 1955 cohort. We find that a higher divorce probability and changes in wage structure are each able to explain a large proportion of the LFP increase. Higher divorce risk increases LFP not because the latter contributes to higher marital assets or greater labor market experience, however. Instead, it is the result of conflicting spousal preferences towards the adjustment of marital consumption in the face of increased divorce risk.

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Document Object Identifier (DOI): 10.3386/w19869

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