According to an 11/26 Washington Post article, divorce rates in Japan spiked following a recent change in divorce laws that allows ex-wives to claim up to half of their former husbands' pensions. The change went into effect in April, and divorce rates immediately rose 6.1 percent.
The news seems like a clear cut story of incentives. Standard economic theory posits that spouses contemplating a divorce compare the benefits of remaining married with those of divorcing. In this case, the benefits of divorce for women have increased, while the benefits of marriage have stayed the same. Consistent with theory, divorce rates shot up.
Part of the increase probably just represents a change in the timing of divorce rather than a change in the overall incidence. The change in pension distributions was part of a law that was passed in 2003, but the pension provisions did not go into effect until April. The timing of the implementation appears to have been well-known. Wives who had already made up their minds to divorce their husbands would have had strong incentives to wait until April. This would have contributed to a decrease in divorce rates just prior to April and a spike immediately afterward.
More interesting, perhaps, are the secondary changes in incentives that are created by this policy. The simple economic analysis given above is one-sided in that it ignores the possible responses of husbands. Husbands, especially older husbands, derive tremendous benefits from the care that their wives can provide. The change in policy should cause husbands to make accommodations within marriage that are more favorable to wives. Thus, the initial assumption that the benefits of marriage for wives would remain constant may not be a good one. The article indicates that Japanese men are aware that accommodations may be required but also that they have been slow to change.
The change also has implications for the people's decisions to marry in the first place. Marriage rates in Japan (and other industrialized countries) have been steadily declining, with people waiting longer and longer to get married. Marriage has been an especially raw deal for women in Japan. Japanese men tend to work long hours and then socialize with colleagues well into the evening. Japanese women are much less likely than American women to work outside the home (using U.S. labor force definitions, see Table 5, about 57 percent of American women were employed in 2006 versus 46 percent of Japanese women). According to a 2001 Japanese time use survey, Japanese women spend an average of 3 1/2 hours a day in housework, while comparable 2003 figures for American women indicate that they spend closer to 2 hours a day in housework.
The change in divorce laws gives single women a pecuniary incentive to marry. It may also increase other incentives by improving the conditions within marriage. Both of these factors could lead to an increase in Japanese marriage rates.
Overall, Japanese women stand to benefit a great deal from this policy--either directly from better divorce settlements or indirectly from more accommodating husbands. At the same time, men will bear considerable consequences. The policy change should provide substantial grist for the family-relations research mill.
(Thanks to Bryan Boulier for the story tip).
