Divorce rates and women's labor supply: a causation exploration

Both Granger causality and three-stage least squares tests with state level panel data suggest that after 1976 divorce does not precede women’s labor force participation. Also, Granger causality tests indicate that increases in women’s labor force participation precede marginal decreases in divorce rates. The results support the theory that women do not change their labor force participation in response to changes in the divorce rates. Secondly, changes in incentives and roles in the marital relationship may lead to a decline in divorce rates in response to an increasing women’s labor force participation rate.