Modeling the Economic Dynamics of Divorce

Timothy Roeper , New York University
Neil G. Bennett, CUNY Institute for Demographic Research (CIDR)

We decompose the economic consequences of divorce into three component parts, the share of pre-divorce household income contributed by each partner, the number of children and allocation of custody, and the re-distribution of resources between divorcing partners via child support. We derive a measure of the growth in personal income required for a person to recover from the economic shock of a divorce as a function of pre-divorce characteristics and custody assignment upon divorce. Our preliminary results demonstrate the long odds that women face in recovering their economic well-being---due to their greater likelihood, relative to men, of earning lower income and retaining custody of the couple's children---in terms of the growth in personal income necessary to achieve it. For most women who retain custody of their children and do not re-partner, a decline in economic well-being is inevitable, possibly a dramatic one.

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 Presented in Session 118. The Economics of Divorce