Marriage Subsidies and Divorce: An Analysis of Marginal Marriages

Wolfgang Frimmel, Martin Halla, Rudolf Winter-Ebmer
Johannes Kepler University, Austria

Policies to promote marriage are controversial. It is essential to distinguish between the average marriage and the marginal marriage created by an intervention. Since the early 1970s Austrian citizens, both marrying the first time, received about €3.800 (in year 2009 Euro) cash on hand with no strings attached. In August 1987, it was announced to suspend this marriage allowance (without any replacement) by 1988. Using Austrian Register Data we study the marriage boom (plus 87 percent) of eligible couples in the last quarter of 1987. Among these we identify 44 percent marginal marriages–couples who marry because of the suspension. Exploiting the group of non-eligible couples, our difference-in-differences approach shows that marginal marriages are about 20 percent more likely to divorce.

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