Financial implications of relationship breakdown: does marriage matter?

In raw data in the UK, the income loss on separation for women who were cohabiting is less than the loss for those who were married. Cohabitees lose less even after matching on observable characteristics including age and children. This di¤erence is not explained by di¤erences in access to bene…ts or labour supply responses after separation. We show that the di¤erence arises because of di¤erences in access to family support networks: cohabitees’household income falls by less because they are more likely to live with other adults, particularly their family, following separation, even after matching on age and children. Divorced women do not return to living with their extended families. The greater legal protection o¤ered by marriage does not appear to translate into economic protection. Keywords: divorce, cohabitation, income loss, matching JEL Classi…cation: D10, J12 Low thanks funding from the ESRC as a Research Fellow, grant number RES-063-27-0211. We are especially grateful to Tom Crossley, Pramila Krishnan and Jo Miles for helpful comments. Correspondence: Hamish Low, Faculty of Economics, Sidgwick Avenue, Cambridge CB3 9DD, UK; [email protected]