Shifting parameters in the economic model of divorce: evidence from the United Kingdom.

I. INTRODUCTION

Divorce is one of the major features of modem life which has important implications for public policy; indeed the Social Security Administration in the United States routinely attempts to predict the number of divorces. Recent research in the USA (Martin & Bumpass, 1989; cited in Lillard & Waite, 1990) suggests that 2/3 of all first marriages end in divorce and that remarriage with new partners are no less prone to dissolution. On current projections, the figure for first marriages in the U.K. is 40%; the annual divorce rate in England and Wales in 1989 was 13 per 1,000 marriages, six times the 1960 rate. Even in a less divorce prone nation such as Denmark (Jensen & Smith, 1990) the divorce rate increased substantially in the 1980s. The crude divorce rate has shown a general upward trend in most industrialized nations since the mid-1960s.

II. BACKGROUND

There have been many econometric studies of the determinants of divorce (see Cameron, 1993 for a detailed review). The majority of these are American and use large samples of individual level data. The only U.K. work has been Sander (1986) and Ermisch (1991). The review by Cameron (1993) reveals a well established pattern of statistically significant positive and negative effects respectively of female and male earnings. Many additional factors have ben included. Those found to be statistically significant are religion, unemployment (positive), early marriage (positive) and female education (positive).

Economists would seek to explain movements in the divorce rate in terms of a rational choice to dissolve the partnership. The specified regression equations are derived from models of utility maximising individuals operating with discounted lifetime profiles. The rationale for marriage lies in gains from trade through specialization, economies of scale in consumption and sharing public goods. The role of the market is to match partners optimally through a search process (Becker et al., 1977). Becker (1981, p. 231) explains the pattern of earnings coefficients in divorce regressions as due to the fact that "women with higher earnings gain less from marriage than other women do because the higher earnings reduce the demand for children and the advantages of the sexual division of labour in marriage." Higher wages for women make it easier for them to survive divorce and therefore make it more likely that an unsatisfactory union will be brought to an …