The role of health insurance in labor supply decisions of divorced females

Labor economics literature provides evidence that marital dissolution induces an increase in labor supply of females. This paper explores an explanation for this finding: Marital separation might place wives at risk of losing health insurance or increase the need for expanded health coverage. Thus, wives must increase their labor supply in order to qualify for health benefits. Using data from the National Longitudinal Survey of Youth, results confirm that marital dissolution is associated with increased female labor supply. However, this effect is mostly concentrated among women who were not previously enrolled in their husbands’ health insurance plans. For wives who were dependent on their husbands for coverage, continuing coverage laws appear to mitigate the effect of marital dissolution on female labor supply.