Divorce laws and fertility

This paper examines the effect of divorce law reforms on fertility using the history of legislation on divorce across Europe. Because the introduction of more liberal divorce laws permanently reduces the value of marriage relative to divorce, these permanent shocks should also affect the fertility decisions of individuals, to the extent that children are considered marriage-specific capital. Our results suggest that divorce liberalization has a negative and permanent effect on fertility. Divorce reforms have decreased the Total Fertility Rate by about 0.2. The magnitude of the effect is sizable, taking into account that the average Total Fertility Rate declined from 2.84 in 1960 to 1.66 in 2006. These findings are robust to alternative specifications and controls for observed (the liberalization of abortion and the availability of the birth-control pill, among others) and unobserved country-specific factors, as well as time-varying factors at the country level. Supplemental analysis, developed to understand the mechanisms through which divorce law reforms affect fertility, shows that both marital and out-of-wedlock fertility decline, but that the impact on marital fertility varies, depending on whether couples are married prior to or after the divorce law reforms, pointing to a selection effect on the composition of marriages. (C) 2014 Elsevier B.V. All rights reserved.