Does the unemployment rate affect the divorce rate? An analysis of state data 1960–2005

We analyzed data from 50 states and the District of Columbia from 1960 to 2005 to study how the unemployment rate and the divorce rate are related. Unemployment is positively related to divorce in a bivariate analysis, but the association is not significant when state and year fixed effects are included in the statistical model. When the sample is divided into time periods, unemployment is negatively and significantly associated with divorce after 1980. These findings provide the strongest support for a “cost of divorce” perspective and suggest that a high rate of unemployment decreases the rate of divorce, net of unobserved time-invariant state characteristics and period (year) trends.