In this article, we explain the evolution of divorce rates in England and Wales over the post-war period. Following the approach of the predominantly North American literature in this area, we focus on the liberalization of divorce law and socioeconomic factors as determinants of the divorce rate. In line with the development of the literature, we find that the introduction of liberalized, no-fault divorce law had a significant effect on the divorce rate in England and Wales. The finding that the law affects the divorce rate is consistent with the view that marriage is characterized by indivisibilities that inhibit Coasian bargaining. (JEL C32, J12, K19)
Our study of divorce rates in England and Wales is based on time-series analysis. An advantage of examining the English branch of Anglo-American law is that econometric analysis may be applied to a sizable, homogeneous base with a long run of consistently collated data. In particular, there is no problem of divorce law--induced migration because we are considering a single jurisdiction. Clearly, however, a disadvantage is the loss of the cross-sectional variation in data drawn across states, of which the U.S. literature has made considerable use (Peters, 1986; Allen, 1992; Brinig and Crafton, 1994; Friedberg, 1998). On balance, we are confident that our results add useful insights by extending the North American approach to English data.
We test for the existence of a long-run linear relationship between the divorce rate and the socioeconomic determinants of divorce, incorporating intervention variables to take account of structural shifts in the data caused by legal innovations in divorce legislation.  We explain short-run movements in both the divorce and marriage rates and also investigate the bivariate causal relationships between marriage and divorce variables. It is important to model both marriage and divorce as long-run effects from changes in divorce law could (but as it happens do not in this article) affect marriage.
We begin with a description of the data used in this analysis and its evolution over time. We then carry out the time-series analysis before summarizing our conclusions.
II. DATA AND GRAPHICAL ANALYSIS
In this section we describe the variables chosen to explain divorce rates in the U.K. and present graphs of the data. Annual data are used from 1948 to 1996, as 1948 is the first consistent observation for the data series used. In particular, 1948 marks the beginning of Supplementary Benefit/National Assistance (welfare) payments and the formal construction of a measure of GNP.
Data definitions and sources are presented in Appendix A. Data selection was guided by theory and existing work (see Friedberg, ). We also incorporate the total number of marriages as an additional explanatory factor and examine the effect of sociolegal change on marriage. Both divorce and marriage series were measured as total counts and transformed to a measure of rate per thousand of population. We analyzed both the count and the rate data for comparative purposes, although our reported results focus on the rate data because there was little to distinguish between results obtained either way. We also tried both first-marriage and all-marriage data but found both series to exhibit similar properties over time (see Fig. 1). Therefore, in the interests of brevity, we report only results obtained using total marriages, although equivalent results for first marriage data and total count data for both marriage and divorce are available from the authors on request.
We restricted explanatory factors to three main areas: male and female earnings, transactions costs, and postdivorce welfare, as these capture the range of influences discussed in the literature. We hope at a future stage to extend the analysis to include a measure of fertility control as a factor influencing the likelihood of divorce. …