Labor supply response of women across the divorce process and the moderating role of children

Abstract

Employment is widely considered a key coping strategy for women against the economic burden of divorce. However, few studies have explored how women adjust their labor supply across the divorce process, particularly considering the moderating role of children’s presence and age. This study uses longitudinal data from the German Socio-Economic Panel (SOEP) from 1984 to 2021 in an event-study approach with fixed effects regressions and an extended control group design. This design allows group-specific age trends to be controlled for in moderation analyses. The findings show that women increase their labor supply in anticipation of divorce, intensify it during the transition period, and subsequently stabilize at a higher level. Whereas childless women show minimal changes in their labor supply, all groups of mothers experience an increase, which is sustained after divorce. Mothers of children aged six years and above tend to increase their labor supply primarily by working more hours, whereas there is some indication that mothers of children aged five years and below mainly enter or re-enter employment. Overall, the results suggest that increased economic activity is an important coping strategy for women during the divorce process, with mothers showing the most pronounced increase in labor supply.