Academic journal article Population

Covering the Costs of Divorce: The Role of the Family, the State and the Market

Academic journal article Population

Covering the Costs of Divorce: The Role of the Family, the State and the Market

Article excerpt

Most OECD countries have observed an increase in divorce rates since the early 1970s. Between 1970 and the end of the 2000s, the total divorce rate rose from 1.0 to 1.9 per 1,000 in the European Union and from 0.8 to 2.0 per 1,000 in France.(1) This evolution is linked to changes in social norms and conceptions of marriage (seen less as a religious commitment and more as a partnership), which tend to trivialize divorce. The demographic trend has been accompanied by changes in the law that make divorce easier, including when requested by only one of the spouses. In France, the Law of 11 July 1975 further facilitated access to divorce by authorizing it on grounds other than fault. More recently, the Law of 26 May 2004 set out four divorce procedures: divorce by mutual consent, "accepted divorce", irretrievable marriage breakdown, and divorce on the grounds of fault. The main objective is to simplify divorce procedures and settle the financial arrangements more quickly. Globally speaking, couples marrying today are more likely to divorce than previous generations owing to greater social acceptance of divorce and simpler divorce procedures.

This shift has been the focus of extensive research in the social sciences. On the basis of the typology proposed by Lambert (2009) to classify sociological research on divorce, two types of research can be distinguished. The first concentrates on the causes of divorce, the second on the consequences for former spouses and their children. The same distinction applies in economics. In the economic analysis of law, a number of theoretical and empirical studies have sought to determine whether or not the introduction of no-fault divorce has led to an increase in the divorce rate. In parallel, in the field of the economics of social policies, considerable research has focused on the impact of separation on changes in the standard of living of former spouses and their children and, to a lesser extent, on the impact of separation on the labour market activity of the former spouses. This research shows that divorcing spouses generally see a drop in their standard of living due to a reduction in economies of scale. While the extent of this drop varies from one country to the next (Aasve et al., 2007; Andress et al., 2009), several facts can be established. In particular, the standard of living decreases more often for women than for men following a divorce (Bonnet et al., 2015), especially if the woman has custody of the children. In addition, the risk of poverty following a divorce is higher for women than for men (Ananat and Michaels, 2008). Furthermore, this same literature shows that public and private transfers between former spouses (child support or alimony) help to reduce the risk of poverty and to narrow the gender gap in living standards following a divorce (Bratberg and Tjotta, 2008; Poortman, 2000). In other words, divorce has an economic cost for the spouses. This cost is shared - though not always equally - between the former spouses, but also between the two spouses and public solidarity.

The aim of our article is to examine these costs by considering divorce as a risk in the economic sense of the term, i.e. as the combination of a probability of occurrence and a level of loss.(2) With divorce now socially accepted, the aim is not to identify ways of reducing the likelihood of divorce, for example by devising incentive mechanisms to prevent its occurrence or by reforming divorce law. The article focuses entirely on the coverage instruments available for protecting individuals against the financial losses arising from divorce.(3)

The economic consequences of a separation are not specific to divorce alone; they concern all types of separations. But the extent of coverage instruments depends on the type of union (marriage, civil partnership, consensual union). Marriage is the form of union with the broadest range of coverage schemes, notably owing to the obligations between spouses created by marriage and the procedures for sharing the couple's assets through the marital property regime. …

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