The impact of job loss on family dissolution

The impact of involuntary job displacements on the probability of divorce is analysed using discrete duration models. The analysis uses the sample of couples from the British Household Panel Survey and distinguishes between types of displacements. Results show that couples in which the husband experiences a job loss are more likely to divorce. Redundancies have small, positive, often insignificant and short-lived effects while dismissals and temporary job endings have larger positive impacts. This is consistent with the interpretation of redundancies as capturing negative income shocks while other types of job loss also convey new information about potential future earnings and match quality.