Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323204 
Year of Publication: 
2025
Series/Report no.: 
arqus Discussion Paper No. 292
Publisher: 
Arbeitskreis Quantitative Steuerlehre (arqus), Berlin
Abstract: 
Using a life-cycle model of household consumption and investment under family transitions, we investigate the long-run financial outcomes of divorces. We find divorce leads to a reduction in wealth, and the loss is larger for higher-educated women. Earlier fertility and a smaller parenthood penalty for women with only a high school diploma result in negative effects of divorces fading away by age 45, whereas for college-educated women, the same is achieved a decade later because of later fertility and a stronger parenthood penalty. Reduced economies of scale, switching to a single-person income, and losing wealth protection within marriage have the strongest impact on the divorced household economy.
Subjects: 
Household Finance
Divorce
Education
JEL: 
D14
D15
E21
G51
Document Type: 
Working Paper

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