The School of Economics invites you to a Microeconometrics and Public Policy Working Group seminar presented by Hayley Fisher (The University of Sydney)

Co -authors:

Sarah Dahmann (The University of Sydney)

Anna Zhu (The University of Melbourne)

Abstract

This paper studies the anticipation effects of future welfare eligibility on current relationship stability. We exploit the 1995 announcement of Australian Widow Allowance, which was to be paid only to women born before 1 July 1955 who separated, divorced, or were widowed after turning 50. As the youngest eligible women were aged 40 in 1995, the policy created an incentive for partnered women with low workforce attachment born before the cut-off date to stay in their relationship until age 50 to secure eligibility. In 1997, this incentive was removed by extending eligibility to women born before the cut-off date who separated after the age of 40. We use high-frequency administrative data in a regression discontinuity design to examine the impact of these policy changes on relationship breakdown of partnered mothers. In line with the incentives, our results suggest that relationship separation rates decrease between the announcements among eligible mothers; however, findings differ by family size.