Wednesday, December 15, 2010

For better or for worse, but how about a recession?

Pretty much everyone is feeling the pain of the recession, unless you specialize in bankruptcy I suppose. How could it get worse? Well if you marriage ended due to the recession that would be a real bummer. So whats the story Rory? Well it looks like years 6-10 of your marriage is when you need to watch out, after the first flush of marital bliss and before she's just resigned to you.

For Better or for Worse, But How About a Recession?
J Arkes, Y-C Shen
In light of the current economic crisis, we estimate hazard models of divorce to determine how state and national unemployment rates affect the likelihood of divorce. With 89,340 observations over the 1978-2006 period for 7633 couples from the 1979 NLSY, we find mixed evidence on whether increases in the unemployment rate lead to overall increases in the likelihood of divorce, which would suggest countercyclical divorce probabilities. However, further analysis reveals that the weak evidence is due to the weak economy increasing the risk of divorce only for couples in years 6 to 10 of marriage. For couples in years 1 to 5 and couples married longer than 10 years, there is no evidence of a pattern between the strength of the economy and divorce probabilities. The estimates are generally stronger in magnitude when using national instead of state unemployment rates.

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