Unilateral divorce versus child custody and child support in the U.S.

This paper explores the response of the divorce rate to law reforms introducing unilateral divorce after controlling for law reforms concerning the aftermath of divorce, which are omitted from most previous studies. We introduce two main policy changes that have swept the US since the late 1970s: the approval of the joint custody regime and the Child Support Enforcement program. Because those reforms affect divorce decisions by counteracting the reallocation of property rights generated by the unilateral divorce procedure and by increasing the expected financial costs of divorce, it is arguable that their omissions might obscure the impact of unilateral divorce reforms on divorce rates. After allowing for changes in laws concerning the aftermath of divorce, we find that the positive impact of unilateral divorce reforms on divorce rates does not vanish over time, suggesting that the Coase theorem may not apply to changes in divorce laws. Supplemental analysis, developed to examine the frequency of permanent shocks in US divorce rates, indicates that the positive permanent changes in divorce rates can be associated with the implementation of unilateral divorce reforms and that the negative permanent changes can be related to the law reforms concerning living arrangements in the aftermath of divorce. This seems to confirm the important role of these policies in the evolution of divorce rates.

► We explore the response of the divorce rate to unilateral divorce reforms.
► We control for joint custody regime and the Child Support Enforcement program.
► They counteract the allocation of rights generated by the unilateral divorce.
► We do not find a reverse response of divorce rates to the unilateral divorce.
► The decline in divorce rates is due to the laws concerning the aftermath of divorce.