Female Income and the Divorce Decision: Real versus Relative, Developed versus Developing

by Salim Turdaliev 


Abstract 

The majority of the influential papers in the field conclude that there is a positive relationship between female income and the probability of divorce. Moreover, the bulk of the literature states that both the real and relative income of the wife plays a role in the determination of divorce. In contrast, we propose that in developing and transition economies, where the wage differentials between men and women are substantial and the majority of the families are of an extended type, the real income of the wife should play little to no role in the determination of divorce. In order to test the above hypothesis the study will utilize the Russian Longitudinal Monitoring Survey (RLMS) and employ a semi-parametric two-step series estimation technique proposed by Newey (2009) in order to overcome the sample selection problem. The proposed study may shed some light on the channels between income and divorce, and help in designing the divorce specific policies in developing and transition economies.