INFLATION AND OTHER AGGREGATE DETERMINANTS OF THE TREND IN U.S. DIVORCE RATES SINCE THE 1960S

This paper extends empirical research on determinants of divorce in two ways. First, I examine the effect of inflation on divorce. Second, the use of a structural time-series modeling approach attributes unobservables and omitted variables to an unobserved component, which allows for the model‘s parameters to be estimated consistently. Inflation is statistically significant, positive, and persistent. I show that the effects of inflation are robust to the inclusion of additional explanatory variables and various trend specifications. The long-run implications of inflation are also substantial. I conclude that price stability has the potential to reduce divorce rates. Key words: divorce, inflation, women‘s educational attainment, economic growth