Three Essays on Intrahousehold Inequality and Separation Outcomes: a European Perspective

This dissertation is on the mechanisms that perpetuate inequality in relation to negative shock experienced in the lifetime. Separation and divorce have been identified in the literature as events that increase gender inequality. Few studies focused on the role of pre-separation intrahousehold inequality in determining gendered outcomes after separation and divorce; yet, intrahousehold inequality takes a key role in engendering disparities in income dynamics between men and women (Gehringer et al., 2015). The dissertation contributes to filling the gap in the literature by studying the impact of separation on the growth path of income and earnings for separated women and men, embedding in the analysis the role played by intrahousehold inequality between former partners. All the three chapters can be read as stand-alone papers, although they are closely related. The first chapter introduces and documents the hypothesis common to the three chapters: inequalities in the aftermath of a separation are driven by pre-existing disparities in the intrahousehold distribution of personal income and earnings between men and women. Using data from the longitudinal component of the Household Finance and Consumption Survey (HFCS) in 2014 and 2017, this chapter provides a descriptive comparative overview on post-separation outcomes in a gender perspective in four European countries: France, Italy, Germany and Spain. The findings reveal gendered patterns in the aftermath of dissolution, with separated individuals experiencing losses in both household income and wealth following the dissolution. Separated women experience greater losses in household income and financial wealth compared to men in all countries. The chapter contributes to the existing literature by offering a comparative longitudinal perspective for Europe, using the unique source of data that jointly provides both income and wealth data for European countries, adding to the analysis the role played by country-specific institutional factors - marital property and family laws. The second chapter uses econometric analysis – a combination of propensity score matching with difference in differences regressions (Heckman et al., 1997; 1998) to test hypothesis emerged in the first chapter and causally identify outcomes for separated versus non separated individuals. The results confirm that a separation penalty for women exists for women in all countries, but in Spain, and the impact of separation varies with the degree of pre-separation within-couple inequality in personal income and in earnings. The chapter also provides evidence on the joint effect of within couple inequality and the country’s institutional arrangements. The chapter contributes to the literature introducing a joint investigation of the within-couple income and wealth inequalities as main determinants of post-separation gendered outcomes, adopting a comparative perspective for four European countries that differ by socio-economic and institutional characteristics. Finally, it is the first contribution in this strand of literature that uses the longitudinal component of a dataset providing harmonized information for several European countries on both income and wealth. The third chapter investigates the causal impact of separation on earnings trajectories in the aftermath of the dissolution, focusing on earnings as outcome of labour supply choices at the intensive and the extensive margin. The main hypothesis is that earnings trajectories are influenced by pre-separation intrahousehold inequality in labour supply, both in terms of labour market participation (extensive margin) and time spent on the market (intensive margin). The role of labour supply inequalities is investigated per se and in conjunction with the pre-separation marital property regime and marital status. Using a combination of pscore matching and difference-in-difference regression and the French longitudinal component of HFCS between 2014 and 2017, the results confirmed that the impact of separation on earnings following the couple dissolution is gendered and depends on pre-separation intrahousehold inequality in terms of earnings but also working hours. Moreover, earnings follow opposite trajectories for men and women. The causal impact of separation on earnings is found also influenced by institutional features. The main contribution to the literature lies in the link between causal effects of separation on earnings and labour market behaviours and in the interplay between pre dissolution intra-household inequality and institutional arrangements regulating partnerships.