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Title: Individual Demographic Transitions and Financial Hardship
Resulting in 1 citation.
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Meder, Martin Erik |
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Individual Demographic Transitions and Financial Hardship Ph.D. Dissertation, Department of Economics, University of Wisconsin - Milwaukee, 2018 Cohort(s): NLSY79 Publisher: ProQuest Dissertations & Theses (PQDT) Keyword(s): Divorce; Family Income; Poverty Permission to reprint the abstract has not been received from the publisher. Many changes in divorce policy have been grounded in the concern that divorce may cause financial hardship, especially among divorced women. Indeed, there is a well-documented correlation between financial hardships and divorce, but the direction of causality remains unclear: it is easy to imagine that divorce causes hardship, that hardship raises the risk of divorce, or that other factors may produce both outcomes. In the second paper, I specify a model that nests all three possibilities and can be estimated using standard limited dependent variable and simultaneous equation methods. Using instruments that have been used in prior work, I estimate the model on data from the National Longitudinal Survey of Youth 1979 Cohort. After controlling for both selection and simultaneity, the structural estimates imply a clear causal structure: I find no evidence that hardship causes divorce, but the event of divorce decreases the income/needs ratio in divorced women's households by approximately 0.32 standard deviations. However, further evidence indicates that the causal effect of the divorce itself is partially obscured by a negative association between hardship and the risk of divorce, which appears to owe to anticipatory responses in women's labor supply. Accounting for those anticipatory responses also reveals a negative structural error correlation between divorce and the income/needs ratio, suggesting some unobserved factors may produce both divorce and hardship. |
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Bibliography Citation
Meder, Martin Erik. Individual Demographic Transitions and Financial Hardship. Ph.D. Dissertation, Department of Economics, University of Wisconsin - Milwaukee, 2018. |