Divorce penalty or divorce premium? A longitudinal analysis of the consequences of divorce for men’s and women’s economic activity

Abstract: Men’s and women’s employment trajectories following divorce is an important issue for analysis because of the possible implications of the changes in employment characteristics on the economic well-being of divorced men and women and their children, and on their levels of dependency on the welfare state. In order to analyse the long-term effects of divorce on an individual’s salary, employment stability, and the number of jobs held, we employ a unique register-based panel data from Israel. Using longitudinal multi-level analyses and linear growth models, as well as fixed-effects models, we find that men’s monthly salary and employment stability levels suffer more than those of women following divorce. Nonetheless, our results are in line with previous research on the negative effect of divorce on women’s economic status. This is because our fixed-effects models show that, although women increase their employment stability and the number of jobs held following divorce, their earnings do not rise following marital disruption. Moreover, women usually experience a reduction in their salary growth rates. For men, our fixed-effects models suggest that their employment stability levels suffer following divorce, but that there are no substantial differences in men’s earnings or in their salary growth rates following marital disruption. These results are discussed within the theoretical frameworks of the marriage premium and the divorce penalty