Breaks in the Breaks: An Analysis of Divorce Rates in Europe

González-Val, Rafael and Marcén, Miriam (2010): Breaks in the Breaks: An Analysis of Divorce Rates in Europe.

Abstract

This paper explores the frequency of permanent shocks in divorce rates for 16 European countries during the period 1930 to 2006, by examining whether the divorce rate is a stationary series, exhibits a unit root, or is stationary around a process subject to structural breaks. A clear finding from this analysis is that not all shocks have transitory effects on the divorce rate. Results provide evidence of both stationarity around occasional shocks which have permanent effects, and of a unit root, where all shocks have a permanent effect on the divorce rate. All of the permanent shocks are positive, and almost all occurred in the 1970s. Supplemental analyses indicate that most of these shocks can be associated with the divorce law reforms that occurred throughout Europe at that time, suggesting an important role of those policies in the evolution of divorce rates.

• Item Type: MPRA Paper
• Language: English
• Keywords: Divorce rate; unit root; structural break
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; J - Labor and Demographic Economics > J1 - Demographic Economics > J12 - Marriage ; Marital Dissolution ; Family Structure ; Domestic Abuse; K - Law and Economics > K3 - Other Substantive Areas of Law > K36 - Family and Personal Law; J - Labor and Demographic Economics > J1 - Demographic Economics > J18 - Public Policy

References

Allen, D. W., (1992). ‘Marriage and divorce: Comment’, American Economic Review, 82(3): 679–685.

Allen, D. W., (1998). ‘No-fault divorce in Canada: Its cause and effect’, Journal of Economic Behaviour & Organization, 37: 129–149.

Allen, D. W., (2002). ‘The impact of legal reforms on marriage and divorce’, in The Law and Economics of Marriage & Divorce, A. W. Dnes and R. Rowthorn, (eds.), Cambridge: Cambridge University Press.

Amato, P. R., (2000). ‘The consequences of divorce for adults and children’, Journal of Marriage and the Family, 62(4): 1269–1287.

Andrews, D. W. K., (1991). ‘Heteroscedasticity and autocorrelation consistent covariance matrix estimation’, Econometrica, 59: 817–858.

Bai, J., (1997). ‘Estimating multiple breaks one at a time’, Econometric Theory, 13: 315–352.

Bai, J., and P. Perron, (1998). ‘Estimating and testing linear models with multiple structural changes’, Econometrica, 66: 47–78.

Bai, J., and P. Perron, (2003). ‘Computation and analysis of multiple structural change models’, Journal of Applied Econometrics, 18: 1–22.

Banerjee, A., J. J. Dolado, J. W. Galbraith, and D. F. Hendry, (1993). Cointegration, Error Correction, and the Econometric Analysis of Non-stationary Data. Oxford: Oxford University Press.

Banerjee, A., R. L. Lumsdaine, and J. H. Stock, (1992). ‘Recursive and sequential tests for a unit root: Theory and international evidence’, Journal of Business & Economic Statistics, 10: 271–287.

Becker, G., (1981). A Treatise on the Family. Cambridge, MA: Harvard University Press.

Bedard, K., and O. Deschênes, (2005). ‘Sex preferences, marital dissolution, and the economic status of women’, Journal of Human Resources, 40(2): 411–434.

Ben-David, D., R. Lumsdaine, and D. H. Papell, (2003). ‘Unit root, post-war slowdowns and long-run growth: Evidence from two structural breaks’, Empirical Economics, 28(2): 303–319.

Ben-David, D., and D. H. Papell, (1997). ‘International trade and structural change’, Journal of International Economics, 43: 513–523.

Bitler, M. P., J. B. Gelbach, H. W. Hoynes, and M. Zavodny, (2004). ‘The impact of welfare reform on marriage and divorce’, Demography, 41(2): 213–236.

Bosker, E. M., S. Brakman, H. Garretsen, and M. Schramm, (2008). ‘A century of shocks: The evolution of the German city size distribution 1925 – 1999’, Regional Science and Urban Economics, 38: 330–347.

Brinig, M. F., and F. H. Buckley, (1998). ‘No-fault laws and at-fault people’, International Review of Law and Economics, 18(3): 325–340.

Brockwell, P. J., and R. A. Davis, (1991). Time Series: Theory and Methods. New York: Springer-Verlag.

Chong, A., and E. La Ferrara, (2009). ‘Television and divorce: Evidence from Brazilian novelas’, Journal of the European Economic Association, 7: 458–468.

Clemente, J., A. Montañés, and M. Reyes, (1998). ‘Testing for a unit root in variables with a double change in the mean’, Economics Letters, 59: 175–182.

Davis, D. R., and D. E. Weinstein, (2002). ‘Bones, bombs, and break points: The geography of economic activity’, American Economic Review, 92(5): 1269–1289.

Dickey, D. A., and W. A. Fuller, (1979). ‘Distributions of the Estimators for Autoregressive Time Series with a Unit Root’, Journal of American Statistical Association, 74(366): 427–481.

Dickey, D. A., and W. A. Fuller, (1981). ‘Likelihood ratio statistics for autoregressive time series with a unit root’, Econometrica, 49(4): 1057–1072.

Doroghi, E., (1955). Grounds for Divorce in European Countries. New York: Research Division of the New School.

Ellman, I. M., and S. L. Lohr, (1998). ‘Dissolving the relationship between divorce laws and divorce rates’, International Review of Law and Economics, 18(3): 341–359.

Friedberg, L., (1998). ‘Did unilateral divorce raise divorce rates? Evidence from panel data’, American Economic Review, 88(3): 608–627.

González, L., and T. K. Viitanen, (2009). ‘The effect of divorce laws on divorce rates in Europe’, European Economic Review, 53: 127–138.

Gray, J. S., (1998). ‘Divorce-law changes, household bargaining, and married women’s labour supply’, American Economic Review, 88: 628–642.

Gruber, J., (2004). ‘Is making divorce easier bad for children? The long-run implications of unilateral divorce’, Journal of Labor Economics, 22(4): 799–833.

Gujarati, D. N., (1995). Basic Econometrics. New York: McGraw-Hill, Inc.

Halla, M., (2009). ‘The Effect of Joint Custody on Marriage and Divorce’, IZA Discussion Paper 4314, Institute for the Study of Labour (IZA), Bonn, Germany.

Hamilton, J. D., (1994). Time Series Analysis. Princeton: Princeton University Press.

Heim, B. T., (2003). ‘Does child support enforcement reduce divorce rates?’, Journal of Human Resources, 37: 774–791.

Im, K. S., M. H. Pesaran, and Y. Shin, (2003). ‘Testing for unit roots in heterogeneous panels’, Journal of Econometrics, 115: 53–74.

Jacob, H., (1988). The Silent Revolution: The Transformation of Divorce Law in the United States. Chicago: University of Chicago Press.

Jarvis, S., and S. P. Jenkins, (1999). ‘Marital splits and income changes: Evidence from the British Household Panel Survey’, Population Studies, 53: 237–254.

Jensen, P., and N. Smith, (1990). ‘Unemployment and marital dissolution’, Journal of Population Economics, 3: 215–229.

Johnson, W. R., and J. Skinner, (1986). ‘Labor supply and marital separation’, American Economic Review, 76(3): 455–469.

Levin, A., C.-F. Lin, and C.-S. J. Chu, (2002). ‘Unit root tests in panel data: Asymptotic and finite sample properties’, Journal of Econometrics, 108: 1–24.

Liu et al., (1997).

Lumsdaine, R. L., and D. H. Papell, (1997). ‘Multiple trend breaks and the unit root hypothesis’, Review of Economics and Statistics, 79(2): 212–218.

Maddala, G. S., and I. M. Kim, (2003). Unit Root, Cointegration and Structural Change. Fifth Edition. Cambridge: Cambridge University Press.

Michael, R. T., (1985). ‘Consequences of the rise in female labor force participation rates: Questions and probes’, Journal of Labor Economics, 3: s117–s146.

Mitchell, W. F., (1993). ‘Testing for unit roots and persistence in OECD unemployment rates’, Applied Economics, 25: 1489–1501.

Murray, C. J., and D. H. Papell, (2002). ‘The purchasing power persistence paradigm’, Journal of International Economics, 56: 1–19.

Nakonezny, P. A., R. D. Shull, and J. L. Rodgers, (1995). ‘The effect of no-fault divorce law on the divorce rate across the 50 States and its relation to income, education and religiosity’, Journal of Marriage and the Family, 57(2): 477–488.

Narayan, P. K., I. Nielsen, and R. Smyth, (2005). ‘Is there a natural rate of crime?’, Monash Economics Working Papers 18/05. Melbourne, AU: Monash University Department of Economics.

Nelson, C. R., and C. I. Plosser, (1982). ‘Trends and random walks in macroeconomic time series: Some evidence and implications’, Journal of Monetary Economics, 10: 139–162.

Ng, S., and P. Perron, (1995). ‘Unit root tests in ARMA models with data dependent methods for the selection of the truncation lag’, Journal of the American Statistical Association, 90: 268–281.

Nixon, L. A., (1997). ‘The effect of child support enforcement on marital dissolution’, Journal of Human Resources, 32: 159–181.

Nunley, J. M., (2009). ‘Inflation and other aggregate determinants of the trend in US divorce rates since the 1960s’, Applied Economics, DOI: 10.1080/00036840802112489.

O’Connell, P. G. J., (1998). ‘The overvaluation of purchasing power parity’, Journal of International Economics, 44: 1–19.

Papell, D. H., (1997). ‘Searching for stationarity: Purchasing power parity under the current float’, Journal of International Economics, 43: 313–332.

Papell, D. H., (2002). ‘The great appreciation, the great depreciation, and the purchasing power parity hypothesis’, Journal of International Economics, 57: 51–82.

Papell, D. H., C. Murray, and H. Ghiblawi, (2000). ‘The structure of unemployment,’ Review of Economics and Statistics, 82: 309–315.

Parkman, A. M., (1992). ‘Unilateral divorce and the labor-force participation rate of married women, revisited’, American Economic Review, 82(3): 671–678.

Peters, H. E., (1986). ‘Marriage and divorce: Informational constraints and private contracting’, American Economic Review, 76(3): 437–454.

Peters, H. E., (1992). ‘Marriage and divorce: Reply’, American Economic Review, 82(3): 687–693.

Perron, P., (1989). ‘The great crash, The oil price shock and the unit root hypothesis’, Econometrica, 57: 1361–1401.

Perron, P., (1990). ‘Testing for a unit root in a time series with a changing mean’, Journal of Business and Economic Statistics, 8: 153–162.

Perron, P., 2006. ‘Dealing with Structural Breaks’, in Palgrave Handbook of Econometrics, Vol. 1: Econometric Theory, K. Patterson and T.C. Mills (eds.), (pp. 278–352). Basingstoke, UK: Palgrave Macmillan.

Perron, P., and T. Vogelsang, (1992). ‘Nonstationarity and level shifts with an application to purchasing power parity’, Journal of Business and Economic Statistics, 10: 301–320.

Pesaran, M. H., (2007). ‘A simple panel unit root test in the presence of cross-section dependence’, Journal of Applied Econometrics, 22: 265–312.

Philips, R., (1988). Putting Asunder: A History of Divorce in Western Society. Cambridge: Cambridge University Press.

Philips, R. (1991). Untying the Knot: A Short History of Divorce. Cambridge: Cambridge University Press.

Piehl, A. M., S. J. Cooper, A. A. Braga, and D. M. Kennedy, (2003). ‘Testing for structural breaks in the evaluation of programs’, Review of Economics and Statistics, 85(3): 550–558.

Rathinam, F. X., and A.V. Raja, (2008). ‘Regulatory failure and judicial intervention: Does public interest litigation help?’, German Working Papers in Law and Economics, Vol. 2008, Article 14. Retrieved from http://www.bepress.com/gwp/default/vol2008/iss1/art14

Rodgers, J. L., P. A. Nakonezny, and R. D. Shull, (1999). ‘Did no-fault divorce legislation matter? Definitely yes and sometimes no’, Journal of Marriage and the Family, 61(3): 803–809.

Seltzer, J. A., (1994). ‘Consequences of marital dissolution for children’, Annual Review of. Sociology, 20: 235–266.

Smith, I., (2002). ‘European divorce laws, divorce rates, and their consequences’, in The Law and Economics of Marriage & Divorce, A. W. Dnes and R. Rowthorn, (eds.), Cambridge University Press, Cambridge.

South, S., (1985). ‘Economic conditions and the divorce rate: A time-series analysis of post-war United States’, Journal of Marriage and the Family, 47: 31–41.

Svarer, M., and M. Verner, (2008). ‘Do children stabilize relationships in Denmark?’, Journal of Population Economics, 21: 395–417.

Tjøtta, S., and K. Vaage, (2008). ‘Public transfers and marital dissolution’, Journal of Population Economics, 21: 419–437.

Vaaler, M. L., C. G. Ellison, and D. A. Powers, (2009). ‘Religious influences on the risk of marital dissolution’, Journal of Marriage and Family, 71(4): 917–934.

Wolfers, J., (2006). ‘Did unilateral divorce laws raise divorce rates? A reconciliation and new results’, American Economic Review, 96(5): 1802–1820.

Yao, Y.-C., (1988). ‘Estimating the number of change-points via Schwarz’ criterion’, Statistics and Probability Letters, 6: 181–189.

Zelder, M., (1993). ‘Inefficient dissolutions as a consequence of public goods: The case of no-fault Divorce’, Journal of Legal Studies, 22: 503–520.

Zivot, E., and D. W. K. Andrews, (1992). ‘Further evidence on the great crash, the oil price shock and the unit root hypothesis’, Journal of Business and Economic Statistics, 10: 251–270.