ALIMONY RIGHTS FOR COHABITING PARTNERS: New evidence of the limits of government intervention in couples” relationships

Legal reforms to protect weaker partners in cohabitation relationships that end in separation seem to bring little benefit for people in partnerships that form after the policy has been implemented. Such policies also seem to make no difference to the duration of new cohabitation relationships; if anything, those formed after a policy has been implemented are less likely to transform into marriages.

These are the central findings of research by Pierre-Andre Chiappori, Murat Iyigun, Jeanne Lafortune and Yoram Weiss, published in the September 2017 issue of the Economic Journal. Their study analyses the consequences of legal changes made to cohabitation arrangements, both theoretically and empirically, drawing on the experiences of changing Canadian policy on alimony rights between the 1960s and the 2000s.

The researchers note that in many countries around the world, cohabitation has become a highly valued alternative to marriage. In response, many governments have implemented rules that seek to imitate the rules of marriage for cohabitation, offering some protection to the weakest economic partner in the union in case of separation.

The first conclusion of the new study is that the impact of such a reform is totally different for couples that were already engaged in a relationship before the reform and for partnerships formed after the implementation of the reform.

In the former case, the impact is essentially what one would expect. By ”changing the rules midway”, government shifts the intra-household balance of power in favour of the weakest partner; as a result, there should be a clear improvement in their welfare.

But couples that are formed after the reform are faced with a completely different situation, because the potential consequences of the new law in case of separation are understood (and taken into account) from the beginning. In particular, such couples can easily ”undo” the objectives of the policy: if the reform favours the weakest partner in case of separation, it could be compensated by smaller transfers to the same partner during cohabitation.

This is exactly what appears to happen when an alimony policy is implemented. The researchers examine the effects of a number of provincial laws implemented in Canada between the 1960s and 2000s, which granted cohabiting partners the right to petition for alimony when they separated. The policies were implemented in different provinces using different rules – a feature that makes it possible to control for confounding factors.

When these policies were implemented, women who were already in cohabitation unions were able to work less and study more, which the researchers interpret as a transfer of resources from their partners to themselves.

But for women who entered cohabitation relationships after the change in the law, there is a neutral or even a negative impact on their likelihood of acquiring resources during the relationship. This is exactly what theory predicts.

These findings suggest that analysis of the impact of the reform should be carefully considered, because its long-term consequences may well be opposite to their immediate impact: instead of helping the weakest partner in the relationship (which they do during the transition phase), it may eventually hurt them in the long run.

In addition, the researchers find that the reform did not even achieve its second stated purpose – namely, increasing the stability of cohabitation relationships. The study finds that relationships formed after the policy implementation did not have a longer duration than those formed before; if anything, they were less likely to transform into marriages.

The researchers” main conclusion is that there is a clear limit to what governments can hope to achieve with these types of policies. Conclusions should not be drawn prematurely from analysis of policies” short-run impact; there is no guarantee that these effects will not disappear or even be reversed in the long run.

”Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly-Formed Partnerships” by Pierre-Andre Chiappori, Murat Iyigun, Jeanne Lafortune and Yoram Weiss is published in the September 2017 issue of the Economic Journal. Pierre-Andre Chiappori is at Columbia University. Murat Iyigun is at the University of Colorado. Jeanne Lafortune is at the Pontificia Universidad Catolica de Chile. Yoram Weiss is at Tel Aviv University.

Jeanne Lafortune