The Effects of Assets on the Economic Well-Being of Women After Marital Disruption

This study uses panel data from the National Longitudinal Surveys of Youth to examine the effects of assets on the economic well-being of women one year after marital disruption. Instrumental variable estimation and seemingly unrelated regression are used. Results suggest that financial assets have positive effects on the post-disruption economic well being of women. Financial assets significantly increase income (including earnings) and reduce welfare receipt. In addition, the coefficients of human capital variables are substantially inflated in models without asset variables, suggesting that the effects of assets are captured by human capital variables when asset variables are omitted. In addition to human capital investment, asset accumulation could be a protective strategy for women and children at risk of marital disruption. Future research should include asset variables when there is reason to believe assets may be relevant.

Project:  American Dream Policy Demonstration (ADD)