The impact of job loss on family dissolution

The impact of involuntary job displacements on the probability of
divorce is analysed using discrete duration models. The analysis uses the
sample of couples from the British Household Panel Survey and distinguishes
between types of displacements. Results show that couples in which the
husband experiences a job loss are more likely to divorce. Redundancies have
small, positive, often insignificant and short-lived effects while dismissals and
temporary job endings have larger positive impacts. This is consistent with
the interpretation of redundancies as capturing negative income shocks while
other types of job loss also convey new information about potential future
earnings and match quality.