Divorce rates in Germany have been increasing since the mid-1960s, however, over the last 15 years this trend appear to be slowing. In accordance, female labor force participation accelerated and is known to be correlated with divorce at the macro level. A common notion – also reflected in Becker’s theoretical model of the new home economics and its related independence thesis – is that women’s participation in the labor market increased their economic independence from the spouse, which in turn decreased marital stability. In this dissertation, I investigated how employment-related characteristics of the first marriage are related to marital stability in the life course and to living arrangements after marital separation. By applying theoretical models separate from the new home economics and considering characteristics of both spouses, I attempted to improve the understanding of both the divorce process and divorce trends in Germany. In Study 1, I discuss the role of stress which may arouse from the couples’ employment situation, can spill-over into the couple and increase the risk of divorce. Study 2 considers paid and unpaid work. Due to the increased participation of women in the labor market, division of household tasks should also have changed and, thus, is investigated with a dyadic and historical perspective on divorce. Study 3 focuses on post-separation living-arrangements. The underlying assumption is, that economic dependence in the first marriage may also reflect in post-separation trajectories of living arrangements, as it likely determines the need for a partner. Based on the longitudinal data from the Socio-economic panel (SOEP), I employ quantitative methods from the toolbox of life course research, to analyze divorce and describe trajectories of living arrangements after marital separation. The results suggest that couples’ employment situation, as measured within this thesis, is negligible for marital stability. However, the dependence on the spouse seems to be a relevant factor, as the association between women’s employment and divorce become smaller in younger marriage cohorts. Economic dependence also affects post-separation living arrangements, as the trajectories are associated with economic resources and women’s employment.