The effect of changing financial incentives on repartnering

Summary

Previous studies of the financial impact of divorce in the short- to medium-term have suggested a role for the presence of children at the time of divorce. Specifically, Brewer and Nandi (2014) found suggestive evidence that the short-run financial impact of divorce is particularly acute for women whose children have left home, raising concerns that these women are not compensated for their marital investments. We use retrospective fertility and marital history data from Understanding Society to examine how the presence and age of children at the time of divorce affects the long-run wealth and home ownership of the divorced. We find no difference in women’s wealth by age of child at divorce, but that men whose children were aged 18 or more at the time of divorce have significantly lower wealth than those whose children were younger when the divorce occurred.