The Millstone Times July 2020


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Chile and Divorce Research Studying divorce is hard — precisely because pinning down cause and effect is challenging.

However, sometimes there are rare events that provide a living laboratory for divorce research, such as the legalization of divorce in Chile in May 2004. Divorce did not exist in this South American country until then, giving me and other researchers the opportunity to study the impact of divorce law on families and the economy. The Chilean law required the breadwinner to pay the homemaker lost wages for the time she spent taking care of the home and kids. This meant that a woman who studied law, married her college sweetheart, had kids and got divorced five years later was entitled to five years of back wages from her spouse equivalent to what a lawyer would have made during that time. According to the law, couples had to get a divorce in the township where they lived when married. The length of time to process a divorce varied depending on the township and the administration and judges in family courts developed by the law. My newly published research shows that both the design of divorce law and how local governments execute it can have profound effects. I used the legalization of divorce to show that pro-homemaker divorce laws increased investments in children’s schooling in married-parent families anywhere from 4% to 6%. The law increased high school enrollment. For an average family in a township with a one-year wait to divorce, high school enrollment increased 6% for children in married parent households. Without a wait time, high school enrollment increased as much as 10%. Married homemakers — women or men — gained power when the law required, they be paid lost wages if they divorced. This increased the financial burden on their spouse should the couple divorce, giving them more bargaining power. As a result, they were more likely to be able to convince their spouse during the marriage to invest in items they cared about, such as their children’s education. Research also shows that access to a speedy divorce process mattered. Threats of divorce are more credible when the process promises to be quick rather than take a year or more to finalize. Chilean lawmakers were focused on protecting vulnerable women and children who may experience divorce, but legalizing divorce had another positive unintended result: higher school participation rates for children in married-couple families compared to children in cohabiting families (not bound by the new divorce law).

Many people may believe that making divorce easier means more people will divorce. But there’s evidence easing the di- vorce process has little effect on increasing divorce rates in the long run. The bottom line: U.S. and foreign studies show the design of divorce laws can benefit society and the economy overall. Creating laws that make divorce easy and quick can redis- tribute resources to the most vulnerable within families. Economists believe humans make rational decisions. Deci- sions based on love may not always seem rational, but they do reveal preferences and economists believe preferences drive decision-making, including the decision to divorce. Misty L. Heggeness is a principal economist and senior advisor in the Research and Methodology Directorate at the U.S. Cen- sus Bureau. She is currently on leave as a visiting scholar at the Federal Reserve’s Opportunity and Inclusive Growth Institute.

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