Divorce and the duality of marital payoff

Empirical studies on the determinants of divorce are scarce in economics. The literature has focused on the impact of income differentials between partners. We extend the model of marital dissolution to integrate time-varying non-pecuniary quality of the match. We use a unique Russian dataset to measure shocks to the non-economic components of the value of marriage. Our estimates suggest that the monetary and non-monetary components enter additively into marriage surplus, but with gender-specific marginal rates of substitution: divorce hazard is more sensitive to the non-pecuniary dissatisfaction of the wife than to that of the husband; impacts of the monetary components are also gender-specific and highly non-linear. We link these findings to remarriage prospects and partial risk sharing.