Economic consequences of marital dissolution in Italy: findings from European Community Household Panel

Fausta Ongaro, Università di Padova
Silvia Meggiolaro, Università di Padova
Stefano Mazzuco, Università di Padova

Marital dissolution is rapidly growing in Italy. The diffusion speed of the phenomenon can catch the country unprepared to cope with some of the problems associated with marital instability. With this work we aim to analyse economic impacts of marital separation in Italy using objective (i.e. equivalent income) and subjective (i.e. perception on household economic situation) indicators; moreover we also consider the labour market transitions expecting that inactive individuals are looking for an additional income source after marital split. Data come from the European Community Household Panel (ECHP). After a descriptive analysis, which shows that separation makes the situation worse for women, we use a Difference-in-Differences estimator combined with Propensity Score Matching techniques (DD-PSM). Results confirm the findings of descriptive analysis: women are significantly worse-off after a marital split whereas men do not show any worsening in their economic situation. Men are even better-off after separation being their equivalent household income significantly higher. For women there is also a significant drop in the ability to make ends meet, to pay annual holidays, and to buy new rather than second-hand clothes and shoes due to marital split. Moreover they report a worsened income situation compared to previous year. This is also witnessed by the effect of separation on the transition in the labour market: inactive women are more likely to enter the labour force after separation, suggesting that some of them are trying to cope with the economic shock caused by the split.