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The economics of divorce theft and exploitation, and why we should repeal unilateral no fault divorce.

Dalrock
August 28, 2011

Divorce theft is a common term in the manosphere, but I have noticed that there is some skepticism amongst our feminist guests on this concept (who often use the term in quotes).  I suspect they would be very surprised to learn that this is a commonly accepted concept among economists studying the issue of marriage and divorce.  It also is at the core of one of feminists’ most cherished fallacies about marriage, the fallacy that divorce is driven by men who dump their wives and trade her in for a newer model once they feel it is to their advantage.

Here is an economists definition of divorce theft from the working paper No-Fault Divorce and Rent-Seeking:

Let us take a look at the family from a contract-theoretical point of view. Before doing so, it is important to define a concept used in contract theory, namely quasi-rents2 . Quasi-rents are defined as “a return to one party to a contract, above what the party could receive if the contract could be dissolved at will at that moment” (Cohen, 1987).

Marriage is intended to be an agreement for life, so it makes sense that during any given period one party or another will be getting more benefit out of remaining married than the other party does.  Quasi-rents are the benefits a spouse experiences if the marriage vows are honored.  The whole point of marriage is to create a condition of trust where both spouses can work towards the long term goals of the couple.  The changing quasi-rents creates a changing incentive to break that trust by divorce or exploitation.  Basically, if there is no method to enforce honoring the contract, at any given time one spouse will have the opportunity to hold the other spouse over a barrel.  They use the apex fallacy of a husband waiting until he has received the early benefits of marriage and then divorcing his wife as an example:

Let us consider the traditional family as described in Becker (1991). In the traditional family wives focus on domestic production whereas husbands focus on labour market production. Thus, as Cohen (1987) and Parkman (1992, 2002) point out, in the beginning of the marriage the husband will enjoy more quasi-rents from marriage since he can focus on a career while caring less about e.g. childrearing. The wife on the other hand will enjoy more quasi-rents in a later stage of marriage when the children are more able to maintain themselves and she can benefit from the larger family income and/or a higher social status. Thus a husband has a clear incentive to appropriate the wife’s future quasi-rents, by divorcing her unilaterally after having extracted most of his quasi-rent from the marriage. This is called quasi-rent destruction.

While the example is provably the exception, it still is helpful in illustrating the concept.  Clearly if a man was able to get away with this he would be rewarded materially for betraying his wife.  But divorce theft isn’t the only option available to the spouse which has the other one over a barrel.  They could also use this change in fortunes to renegotiate the terms of the marriage in their favor under threat of divorce, which economists call exploitation:

Brinig and Allen (2000) argue that there are two different types of quasi-rent destruction. First of all, quasi-rents could be appropriated within marriage through the renegotiation of the rent distribution. They call this exploitation. Secondly, and more important in this paper, quasi-rent may be appropriated through divorce. This is what they call appropriation. Renegotiation of the rent distribution within marriage may lead to divorce if one of the spouses has too little bargaining power, which leads her or him to perceive divorce as a better alternative to being married and heavily ‘exploited’.

Brinig and Allen may seem familiar to you, because they wrote the paper I quoted in The child support catastrophe (the same paper these authors are citing above).  The Brinig and Allen quote I shared from the previous post is right on topic here (emphasis mine):

Our results are consistent with our hypothesis that filing behavior is driven by self-interest at the time of divorce. Individuals file for divorce when there are marital assets that may be appropriated through divorce, as in the case of leaving when they have received the benefit of educational investments such as advanced degrees. However, individuals may also file when they are being exploited within the marriage, as when the other party commits a major violation of the marriage contract, such as cruelty.  Interestingly, though, cruelty amounts to only 6% of all divorce filings in Virginia.50 We have found that who gets the children is by far the most important component in deciding who files for divorce, particularly when there is little quarrel about property, as when the separation is long.

What Brinig and Allen found is that children are typically a marriage’s most valuable asset, and that women are using the near guarantee that they will get custody against their husbands.

Making matters worse unilateral no fault divorce laws give the upper hand to whichever party wishes to engage in divorce theft or exploitation, as the authors of the working paper explain:

If only one of the spouses wants to divorce, spouses engage in ‘bargaining in the shadow of the law’ (Mnookin and Kornhauser, 1979), where the existing law becomes a threat point for one of the spouses. In a legal system with only consensual divorce the spouse not seeking divorce has the bargaining power….

When the law allows for unilateral divorce the bargaining power shifts to the partner seeking divorce, who can always threaten with unilateral divorce (Fella et al., 2004).

Under a consensual system, the process naturally deters the would be divorce thief or exploiter.  The shift to unilateral no fault divorce shifts the power to the spouse who wishes to abuse the system.  This is bad for marriage as an institution, and therefore bad for children, as Brinig and Allen explain:

The legal ramifications of the no-fault variable are perhaps the most interesting. In the jurisdictions we studied, even taking into account the higher divorce filing rates, women take advantage of the no-fault option more than do their husbands.51 From the woman’s perspective, repealing no-fault laws may cause harm as compared to passing reforms that will make marriages better.52 However, if filing behavior is mostly driven by attempts to exploit the other partner through divorce, tougher laws may be socially more beneficial. Because the custody coefficients were the largest by far, family law reformers may want to concentrate on formulating custody rules that will alter the spouses’ relative gains from marriage. The authors favor custody rules that replicate the patterns in marriage as closely as possible while giving each spouse a meaningful role (i.e., not zero) after divorce, as opposed to either a “winner takes all” rule like “maternal preference” or “primary caretaker” or a presumption of equal joint custody shares.  A replication rule would not make either spouse better off divorced than during marriage (Altman, 1996).

Interestingly, the authors of the working paper touch on the issue of declining sexual marketplace power (SMP) for wives as they age.   This  reduces women’s opportunities to engage in divorce theft and/or exploitation:

Other authors point out that during marriage the sex ratio – the ratio of single women to single men per age cohort – evolves unfavourably over time for women (see Browning et al. (2008), Chapter 1; or Chiappori et al. (2002) who uses the evolution of the sex ratio to identify the distribution rule in the collective model), reducing the outside options for women, and thus further limiting their bargaining power. As Chiappori et al. (2002) point out: when there exists a relative abundance of women, bargaining power and therefore the gains from marriage will shift in favour of the husband. This may in turn affect the behaviour of the husband who might engage in exploitation or appropriation. The figure below clearly shows that from the age of 40 the sex ratio rises steadily indicating relatively more and more single women.

Unfortunately they are laboring under a very limited understanding of the SMP since they lack knowledge of game.  They see the changing sex ratio as the cause and not the symptom of women’s changing SMP options.  They also assume that men turn around and use their opportunity to engage in divorce theft and exploitation against women as their wives age.  We know from Brinig and Allen that who files is a strong indicator of which party is attempting to engage in divorce theft and/or exploitation, and that while divorce rates fall dramatically as wives age women are still initiating divorce twice as often as men.  If men were truly taking their turn at divorce theft and exploitation the way women are, we would expect to see divorce rates spike when women reached middle age.  We would also expect to witness a corresponding flip in the ratio of initiation with men initiating divorce more often than women.  But we don’t see this.  What we see instead is steadily declining divorce rates as the potential for women to engage in divorce theft declines, and a constant relationship regarding who initiates divorce.  While fewer and fewer women are attempting divorce theft and exploitation as they get older, the pattern remains the same.

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Post Information
Title The economics of divorce theft and exploitation, and why we should repeal unilateral no fault divorce.
Author Dalrock
Date August 28, 2011 6:46 PM UTC (11 years ago)
Blog Dalrock
Archive Link https://theredarchive.com/blog/Dalrock/the-economics-of-divorce-theft-and-exploitation.12227
https://theredarchive.com/blog/12227
Original Link https://dalrock.wordpress.com/2011/08/28/the-economics-of-divorce-theft-and-exploitation-and-why-we-should-repeal-unilateral-no-fault-divorce/
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