Marital Instability and Female Labor Supply

We review the relationship between female labor supply and marital instability. Traditionally, the sociological literature has focused on the impact of female labor supply on the likelihood of divorce with specific reference to the independence hypothesis. However, recent studies in sociology and economics provide more consistent evidence that the direction of causality may be the other way around. Women might increase their labor supply in the anticipation of divorce. We review the methodological developments in measuring economic independence and the recent evidence on its impact on divorce. Then we turn our attention to the alternative literature on the impact of divorce on female labor supply. We outline the theoretical arguments put forward by this literature, discuss the methodological issues in establishing causality, summarize the findings, and suggest avenues of further research.