NO-FAULT DIVORCE IN CANADA ITS CAUSE AND EFFECT

NO-FAULT DIVORCE IN CANADA: ITS CAUSE AND EFFECT Allen, Douglas W, Ph. D Simon Fraser University

What It Is All About • No-fault divorce presumably originated from “inefficient marriages” in 1940 -60 s • Author argues this new legislation serves efficiency • First ever study on Canadian data (Census) • Divorce rates increased since introduction • Three segments: 1) Efficient vs Inefficient Marriages 2) Economic theories of divorce 3) Hypothesis Testing (Math)

“Marriage Contract” • Inefficient marriages transaction costs • No-fault divorce good marriages gone bust • Fault divorce bad marriages kept afloat Q: What caused a rise in “inefficient marriages”? A: Several theories: 1) contraception 2) feminism, flight from traditional values. 3) labor force participation starting in WWII (Allen)

Economic Theories • • More women in labor force doing more men’s jobs Variance in labor type among women Variance in expectations for future marital partner Low gains + expectation shock = divorce

Hypothesis Testing • Labor force participation is the tip of the iceberg • Real issue = mistakes in partner selection • No-fault divorce is a result, not a catalyst • Two tests: 1) Relationship b/w no fault divorce and participation (Duration model: ) *Data from Stat. Can: 1984 Family History Survey 2) Regression to corroborate results from 1) *Data from Census

Conclusion • The introduction of no-fault divorce is a response • By-product: efficient and inefficient divorce • Division into efficient and inefficient explains paradox in judgment by empirical vs. observation

Discussion Questions 1/3 1. No-fault Divorce was first introduced in California in 1969 but officially became an option in Canada only in 1986. What are some factors that have contributed to the delay in your opinion? 2. The change in legislation, according to Allen, not only "helped" dissolve inefficient marriages but also induced inefficient divorces (that is, ex-post total wealth is lower than in the marriage union). What other transaction costs can you think of?

Discussion Questions 2/3 3. Do you think the no-fault divorce law encouraged doubting spouses to divorce or was is rather a liberator for people that realized they had made a mistake? In your opinion, has this law contributed to a rise in inconsiderate marriage unions nowadays, since spouses bear a lot less risk to be "stuck" with a "wrong person"? 4. In no-fault divorce environment there is always a chance that a marriage that should not break up will do so, whereas in a fault divorce case the opposite is true. Do you think that the proportion of good marriages broken up due to this legislation has become statistically significant over the years? Why or why not?

Discussion Questions 3/3 5. Theoretically, if you were married, how would you decided on the factors determining whether your marriage turned out efficient of inefficient? What are the main elements, in your opinion?