This Journal of Human Resources paper by Elizabeth Ananat and Guy Michaels is a few years old now, but as I’m readying my first dissertation chapter for submission, I’ve been reading up and reminding myself of various literatures and it seemed appropriate. Ananat and Michaels present an intuitive, causal story for how divorce causes women to live in poverty. It seems pretty straightforward: the break-up of a marriage means women are less likely to live in a household without income from someone else, but also that women work to compensate for such income losses by going back to work, moving in with siblings, etc.
Divorce increases the probability of living in a household without other earners. In fact, we estimate that breakup of the first marriage significantly increases the likelihood that a woman lives in a household with less than $5,000 of annual income from others—the likelihood rises from just over 5 percent for those whose first marriage is intact to nearly 50 percent for those whose first marriage breaks up. However, women can and do respond to income loss from divorce by combining with other households, through paths including remarriage or moving in with a roommate, sibling, or parents. Moreover, women further compensate through private (for example, alimony and child support) and public (for example, welfare) transfers, and by increasing their own labor supply.
I use the same logic to say that as long as she has some idea that the divorce (or union dissolution in my case as I include unmarried couples) is imminent, a woman should make compensatory decisions regarding the future loss of income, not just the immediate loss of income.
E.O. Ananat with Guy Michaels. “The Effect of Marital Breakup on the Income and Poverty of Women with Children.” Journal of Human Resources 43.3 (2008): 611-629.
I’m going a little out of order here because I’m trying to deal with something random on my first chapter that arose this week.
The second chapter of my dissertation has to do with expectations, incidentally the unifying theme of this year’s Nobel Prize in Economics.
Believe me, I’m not there.
In this chapter, (chapter2_health) I show that a mother’s expectations of financial support from her child’s father influence how she invests in her child’s health. In the Fragile Families and Child Wellbeing survey, women are asked a the birth of their child whether the father promised financial support. Around the child’s first birthday, they are asked when the child last went to the doctor and for long they breastfed. Interestingly, the promise of financial support is a significant predictor of whether the last doctor’s visit was in the last three months, but the effect is much more pronounced for black women. For white women, the promise of financial support is a significant predictor of how long a woman breastfed.
When I started this paper, I imagined I would be addressing a simple problem of financial (doctor’s visits) versus non-financial (breastfeeding) investments. The promise of support would make you feel richer and thus more likely to invest where you might feel constrained financially.
It turns out, however, that the effect is much more complicated that. The differences by race, which are largely differences of SES and class given the sampling strategy, indicate that a promise of support likely means very different things to people in different circumstances. The lack of distinction in terms of affecting financial versus non-financial investments also indicates that the question likely has a psychological or cultural angle that is not captured by the question itself.
In short, be careful with questions about expectations.
There is a large debate in the economics community about the value of putting out working papers. When a working paper creates significant buzz, whether in the media, on twitter, or even just among economists, the conclusions in the paper take hold. That first impression is shown to be very persistent, even when a later version of the paper comes up with opposite results.
At least as long as I’ve had this blog, I’ve had a note on my research page saying that links to working papers are forthcoming. I’ve completed my dissertation and am working on revising the chapters to submit to journals. I’m fairly certain that the big picture of these papers isn’t going to change and my advisors were insistent that each of my chapters was very close to that point. Consequently, revisions are small at this point, but that doesn’t mean that I can’t benefit from a little help from the internets.
Over the next few weeks, I will post each of the chapters of my dissertation here. Comments, suggestions, typos, criticism, etc. are welcome.