Marriage, Divorce, and Social Safety Net Policy

Abstract

I study the effects of the Earned Income Tax Credit (EITC) and welfare reforms of the 1990s on flows into and out of marriage. I use test scores to predict who is most likely to be affected by the policy changes, and employ a flexible functional form to estimate heterogeneous effects. I find that lower‐earning married women are more likely to divorce as the EITC expands, but I find no effect of EITC generosity on marriage. I find little effect of welfare generosity on marriage or divorce flows for any group. My results suggest that there are nonsymmetric responses to policy on flows into and out of marriages.

Marriage in Old Age: What Can We Learn About Policy Impacts on Same-Sex Couples?

“…. In addition to the incentives we describe here, economists have generally concluded that joint taxation in the United States suppresses married women's labor supply, thereby reinforcing traditional gender norms surrounding family labor supply before retirement(Rosen 1977;Eissa and Hoynes 2004;LaLumia 2008;Isaac 2022).11. If the later marriage ends, then individuals can once again access benefits from the earlier marriage…”

“…The marriage distortions resulting from redistributive policies have been previously studied, though the literature has been hampered by multiple empirical challenges. Almost all of the attention in that literature has gone to prime-age couples (e.g., Rosen 1977;Alm and Whittington 1995;1997;Dickert-Conlin 1999;Light and Omori 2008;Michelmore 2018;Barigozzi, Cremer, and Roeder 2019;Roeder and Ullmann 2019;Isaac 2020;Chatterjee 2021;Isaac and Jiang 2022, among others). While policy-based marriage incentives can be quite substantial for older couples, they differ in important ways, and some of the empirical difficulties are even greater for this group.…”

Suddenly Married: Joint Taxation and the Labor Supply of Same-Sex Married Couples AfterU.S. v. Windsor

“…To estimate the income effect, I measure changes in the couple's predicted marriage subsidy (or penalty), which is a common measure of marriage incentives under joint taxation (Alm and Whittington 1999;Eissa and Hoynes 2003;Michelmore 2018;Isaac 2020;Friedberg and Isaac Forthcoming), but which is new to the literature estimating income effects of taxation because shifting from the single to joint tax schedule is endogenous in most circumstances. The marriage subsidy is defined as the difference between the sum of the individuals' tax liabilities if they are single and the couple's joint tax liability if they are married.…”

“…wage elasticity.xxviii The marriage subsidy is traditionally defined as the difference between the sum of the individuals' tax liabilities if they are single and the couple's joint tax liability if they are married. It is a common measure of tax incentives to marry or divorce in the family structure literature(Alm and Whittington 1995;1999;Ellwood 2000;Eissa and Hoynes 2003;Michelmore 2018;Isaac 2020;Friedberg and Isaac Forthcoming), but is new to the literature seeking to estimate income effects of taxation because shifting from the single to joint tax schedule is endogenous in most circumstances. xxix I use the NBER TAXSIM simulator and predicted earnings to obtain each individual's and couple's predicted federal tax liability in year 𝑡 and the counterfactual tax liability the individual and couple would face in year 𝑡 if United States v. Windsor had not occurred.…”