Effects of Divorce Risk on Women\u27s Labor Supply and Human Capital Investment

This paper examines the effects of the divorce law liberalization of the early 1970s on the increase in divorce rates during the same time period. A review of the evidence suggests that the law changes were not a major driver of the divorce rates; but the policy changes appear to have affected behavior even for those who did not divorce. The results here suggest that as they saw the laws changing, young women in the divorce reform states redirected some of their investments from marriage to their own human capital. The perceived increase in the probability of divorce motivated women to improve their options outside of marriage