Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly-Formed Partnerships

Jeanne Lafortune, Pierre Chiappori, Murat Iyigun and Yoram Weiss

No 424, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: The paper analyzes the effect of a reform granting alimony rights to cohabiting couples in Canada, exploiting the fact that each province extended these rights in different years and required different cohabitation length. A theoretical analysis, based on a collective household model with a matching framework, predicts that changes in alimony laws would affect existing couples and couples to-be differently. For existing couples, legislative changes aimed at favoring (wo)men do benefit them, especially if the match quality is low. However, for couples not yet formed, they generate offsetting intra-household transfers (in our model, of leisure) and lower intra-marital allocations for the spouses who are the intended beneficiary. Our empirical analysis confirms these predictions. Among cohabiting couples united long enough before the reform, obtaining the right to petition for alimony led women to lower their labor force participation. These results, however, do not hold | and, in some cases, are reversed for newly formed cohabiting couples.

Keywords: Alimony; Cohabitation; Bargaining; Policy neutrality; Labor supply (search for similar items in EconPapers)
JEL-codes: J12 J22 K36 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-dem
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Citations: View citations in EconPapers (14)

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Journal Article: Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly Formed Partnerships (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:424

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