Applied Economics Seminar Series. Subjective Divorce Risk, Perceived Outside Options, and Intra-Household Allocation
Published: 6 May 2026
2 June 2026. Professor Adeline Delavande, University of Technology Sydney
Professor Adeline Delavande, University of Technology Sydney
"Subjective Divorce Risk, Perceived Outside Options, and Intra-Household Allocation"
Wednesday, 2 June. 15:00
Room 281 ASBS
Abstract
Despite the central role of divorce in shaping economic inequality and household behaviour, we know remarkably little about how couples perceive divorce risk or how they expect their lives to change in the event of marital dissolution. This paper studies subjective divorce risk and its implications for intra-household allocation. We bring new evidence from original data collected from both spouses within couples in the US. First, we document substantial heterogeneity in subjective divorce risk. Second, we show that higher perceived divorce risk is systematically associated with more individualised allocation within the household, including weaker income pooling, greater use of separate accounts, and lower joint asset ownership. Third, we elicit expected economic outcomes conditional on divorce and on remaining married, providing novel evidence on the subjective individual-specific treatment effect of divorce. Women expect divorce to substantially increase their future labour force attachment, while men anticipate little adjustment in labour supply. We then develop a model of household decision-making with limited commitment and endogenous divorce risk. In the model, the possibility of separation shapes current allocations, consistent with what we see in the data. Divorce risk arises endogenously from the participation constraints of spouses, linking beliefs about marital stability to consumption and labour supply.
Bio
Adeline is a Professor of Economics at University Technology of Sydney and Nova School of Business and Economics. She is an applied microeconomist with a strong interest in economic demography, health and development. Her research focuses on understanding how people make decision under uncertainty using subjective expectations data.
For further information, please contact business-seminar-series@gla.systa-s.com.
We foster a positive and productive environment for seminars through our Code of conduct.
First published: 6 May 2026