Not yet Married but Already Paying the Price? The Impact of Granting Alimony Rights to Cohabiting Partners

Jeanne Lafortune, University of Maryland

This paper estimates the effect of granting alimony rights to cohabiting couples. In Canada, these rules were implemented at different times in different provinces and with different eligibility rules in terms of relationship durations, allowing to precisely estimate their causal effects in a triple-difference framework. Obtaining the right to petition for alimony led unions to be more durable but less likely to lead eventually to marriages. It also led females to decrease their labor force participation as these laws increased their bargaining power within the household. Results are robust to a variety of specifications and controls. Furthermore, there is no evidence of similar trends for married couples. More crucially, alimony rights appear to change partners' labor supply only among couples formed before legislative changes occurred. This highlights the importance of understanding how relationship formation may respond to the legal framework directly, for which some indicative evidence is provided.