Divorce as risky behavior

Given that divorce often represents a high-stakes income gamble, we ask how individual levels of risk tolerance affect the decision to divorce. We extend the orthodox divorce model by assuming that individuals are risk averse, that marriage is risky, and that divorce is even riskier. The model predicts that conditional on the expected gains to marriage and divorce, the probability of divorce increases with relative risk tolerance because risk averse individuals require compensation for the additional risk that is inherent in divorce. To implement the model empirically, we use data for first-married women and men from the 1979 National Longitudinal Survey of Youth to estimate a probit model of divorce in which a measure of risk tolerance is among the covariates. The estimates reveal that a 1-point increase in risk tolerance raises the predicted probability of divorce by 4.3% for a representative man and by 11.4% for a representative woman. These findings are consistent with the notion that divorce entails a greater income gamble for women than for men.     

LOCUS OF CONTROL AND JOB TURNOVER

In this article, I investigate how a worker's locus of control, that is, the perception of control over daily events, affects job‐to‐job and job‐to‐nonemployment turnover. I find that an increase in internality—the degree to which respondents believe that the outcomes of their life events are determined by their own actions versus external factors—increases job‐to‐job transitions. In addition, the annual wage growth rate and the wage gains from job‐to‐job transitions increase with internality. The influence of the locus of control on job‐to‐nonemployment turnover, however, is insignificant on controlling for the worker's level of attained education. (JEL D83, J63)     

Grandparent caregiving and cognitive functioning among older people: evidence from Korea

Review of Economics of the Household - Caregiving for grandchildren is becoming common and plays an important role in the childcare system in many countries. This study examines whether caregiving...