A Reconsideration of the Economic Consequences of Marital Dissolution

We use longitudinal data from the Panel Study of Income Dynamics to assess the economic consequences of divorce and separation for the women and men involved. In contrast to previous studies focusing exclusively on those who remain unmarried, our approach integrates the probability of remarriage into the analysis and produces a much less dramatic picture of change in economic status than analyses not incorporating remarriage. However, we also find evidence of selection bias in the subgroup of women who remarry, suggesting that currently unmarried women might not improve their economic status through remarriage as much as women who have remarried.