Covering the Costs of Divorce: The Role of the Family, the State and the Market
The aim of this article is to identify all the costs of divorce and to review the various coverage instruments – private and social – used to cover those costs. In terms of economic analysis, divorce can be considered as a risk since it is possible to establish a probability of occurrence and the amount of the costs involved. Divorce risk is private in that it affects the wealth of the former spouses. The private costs it engenders may be covered by a range of instruments, some based on private solidarity, organized ex post (alimony) or ex ante (community of property marriage contracts), and others on individual precautionary strategies (remaining on the job market, savings, insurance, separate property marriage contracts). Divorce is also a social risk, in that it generates socially costly externalities (lone parenting, poverty, gender inequalities), whose scale may be reduced by implementing appropriate social and tax policies.
- private costs
- social costs