Volume 23, Issue 89 (8-2023)
refahj 2023, 23(89): 9-44 |
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Aama Bandeh Gharaei H, Seyedi S M, mokhtaritorshizi H, Salehnia N. (2023). The Impact of Unemployment, Inflation, and Participation Rate of Women in Labor Market on Divorce Process in Iran. refahj. 23(89), 9-44. doi:10.32598/refahj.23.89.4245.1
URL: http://refahj.uswr.ac.ir/article-1-4150-en.html
URL: http://refahj.uswr.ac.ir/article-1-4150-en.html
Keywords: Divorce rate, Female employment of labor market, Unemployment, and Inflation, 2SLS Method.
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Extended Abstract
Introduction
The changes in the family institution go back to the mid-1900s; the decrease in the marriage rate and the increase in divorce are among the common changes in recent years. The growth of the divorce rate should be considered one of the severe harms of the changes in the family institution, which has spread globally and brought about many social problems. The economic situation is a practical dimension of divorce because the dire economic situation causes quarrels and conflicts between families, which increases the decision to divorce between couples. A parallel is observed between the trend of macro variables in Iran’s economy and the trend of divorce.
On the one hand, the trend of divorce rate in Iran’s society, like other countries, has been upward in recent years. On the other hand, macroeconomic variables in Iran do not have a favorable situation. Also, the participation of women in the labor market has expanded in the last few decades; during the same period, the marriage dissolution rate has increased, so the hypothesis of women’s employment is an influential factor in the expansion of the divorce rate seems to be true (Kalmijn & Poortman, 2006; Ruggles, 1977; Schoen et al., 2002). However, the opposite hypothesis states that improving women’s socio-economic status does not necessarily increase the risk of marital dissolution but stabilizes marriage (Sayer & Bianchi, 2000; Sigle-Rushton, 2010; Stevenson & Wolfers, 2007). Therefore, examining inflation, unemployment, and the participation rate of women in the labor market on divorce is vital.
The initial studies of divorce in economics go back to Becker’s studies, and the theory of rational choice developed by Gary Becker reflects the change of perspective towards divorce. Proponents explain the rational choice of divorce in terms of increasing the cost of marriage for at least one of the couples. According to this view, the decision to divorce is the result of an exchange (Becker, 1977). Regarding the effect of women’s employment, various studies have shown that working women get divorced more than those who are not working (South, 2001). Working women can bear the economic costs of divorce because they receive salaries and are less economically dependent on their husbands. Becker et al. believe that economic shocks cause the spread of divorce in society. The studies in this field confirm the results of their work (Weiss& Willis, 1997; Charles & Stevens, 2004; Hess, 2004). Inflation and unemployment, two macroeconomic variables, can be considered as an indicator of the economic situation or other unexpected developments (shocks). Inflation and unemployment reduce the income and wealth of people. This issue expands economic problems and is the main factor in creating economic hardship, a situation that increases stress in society, which has a negative effect on the quality of relationships between spouses, and ultimately the divorce rate increases (Fischer & Liefbroer, 2006).
Method
Is divorce affected by economic factors such as the unemployment rate and inflation? The present study also examines the issue that the greater participation of women in the labor market in society means a higher tendency to divorce. The research is modeled using the structural equation model (SEM) and estimated by the 2SLS method. A structural equation model is constructed to simultaneously estimate an equation for marriage dissolution and an equation for the average age of women at first marriage, because there is a simultaneous effect between these two variables. The system of equations is specified as follows (2 and 3).
CDRt=α0+α1 FEt+α2 UNt+α3 CPIt+U1t (2)
MAFMWt=β0+β1 FEt+β2 PADt+U2t (3)
The current research seeks to explain the divorce process in Iran and the impact of economic and social variables on the phenomenon. So, it is optional to consider complete demographic and socio-economic model. Therefore, the explanatory variables in the divorce rate equation and the average age of women for the first marriage have been considered. Their nature, i.e., endogenous and exogenous, has been determined. The raw divorce rate variables (CDR), the average age of women at first marriage (MAFMW), and the share of women’s employment in the labor market (FE) are considered exogenous variables, the data of which were collected from the Iranian Statistics Center. Other variables, like inflation based on the consumer price index (CPI), unemployment rate (U), its statistics from the Central Bank of Iran, and the age difference of the couple at the first marriage (PAD), whose information is collected from the Iranian Statistics Center, are exogenous and predetermined variables. The studied period includes 1370-1400 (1991-2021). Also, the logarithm of the variables has been used in estimating the model.
Findings
After determining the instrumental variables, the coefficients were estimated using the 2SLS method, and the results are reported in Tables (2 and 3). The result of 2SLS estimation for the divorce rate in the table above (2) shows that women’s employment has a significant positive effect in explaining the dynamics of divorce. In other words, higher levels of women’s activity as a labor force increases the probability of divorce. The effect of the unemployment rate and inflation is also significant; the coefficients equals 0.705 and 0.143, respectively (Table 2). Therefore, it can be concluded that the dire economic situation causes an increase in divorce in society. Also, the obtained results support the hypothesis that economic shocks or disturbances cause the spread of divorce in society. The relationship between other variables with divorce can be seen, here.
Table 1: Results equation 2 (Crude divorce rate)
Source: Author’s calculations
Table 2: Results equation 2 (Crude divorce rate)
Source: Author’s calculations
Discussion
The 2SLS estimation results for the crude divorce rate shown (Tables 2 and 3) show that women’s participation in the labor market significantly affects divorce dynamics. These results support the view that financial security is a decisive determining factor in the spread of divorce. However, it should be noted that a part of it can be explained through the existence of divorce between spouses; that is, before the employment of women, there was a divorce issue between spouses, which manifests itself when the woman is employed in the labor market, or if the woman is employed when it occurs. The problem between couples is that women’s financial dependence is not an obstacle to divorce. Unemployment and inflation also have a significant effect on the divorce process. This shows that the economic situation at the level of society affects the increase in the dissolution of the marriage between couples. Therefore, one of the essential and influential dimensions in increasing the divorce rate in Iran is the chaotic economic situation in the last few decades.
Ethical considerations
Authors’ contributions
All authors contributed in designing, running, and writing all parts of the research.
Funding
No direct financial support was received from any institution or organization for the preparation of this article.
Conflicts of interest
This article does not overlap with other published works of the authors.
Following the ethics of research
In this article, all rights related to research ethics have been respected.
Introduction
The changes in the family institution go back to the mid-1900s; the decrease in the marriage rate and the increase in divorce are among the common changes in recent years. The growth of the divorce rate should be considered one of the severe harms of the changes in the family institution, which has spread globally and brought about many social problems. The economic situation is a practical dimension of divorce because the dire economic situation causes quarrels and conflicts between families, which increases the decision to divorce between couples. A parallel is observed between the trend of macro variables in Iran’s economy and the trend of divorce.
On the one hand, the trend of divorce rate in Iran’s society, like other countries, has been upward in recent years. On the other hand, macroeconomic variables in Iran do not have a favorable situation. Also, the participation of women in the labor market has expanded in the last few decades; during the same period, the marriage dissolution rate has increased, so the hypothesis of women’s employment is an influential factor in the expansion of the divorce rate seems to be true (Kalmijn & Poortman, 2006; Ruggles, 1977; Schoen et al., 2002). However, the opposite hypothesis states that improving women’s socio-economic status does not necessarily increase the risk of marital dissolution but stabilizes marriage (Sayer & Bianchi, 2000; Sigle-Rushton, 2010; Stevenson & Wolfers, 2007). Therefore, examining inflation, unemployment, and the participation rate of women in the labor market on divorce is vital.
The initial studies of divorce in economics go back to Becker’s studies, and the theory of rational choice developed by Gary Becker reflects the change of perspective towards divorce. Proponents explain the rational choice of divorce in terms of increasing the cost of marriage for at least one of the couples. According to this view, the decision to divorce is the result of an exchange (Becker, 1977). Regarding the effect of women’s employment, various studies have shown that working women get divorced more than those who are not working (South, 2001). Working women can bear the economic costs of divorce because they receive salaries and are less economically dependent on their husbands. Becker et al. believe that economic shocks cause the spread of divorce in society. The studies in this field confirm the results of their work (Weiss& Willis, 1997; Charles & Stevens, 2004; Hess, 2004). Inflation and unemployment, two macroeconomic variables, can be considered as an indicator of the economic situation or other unexpected developments (shocks). Inflation and unemployment reduce the income and wealth of people. This issue expands economic problems and is the main factor in creating economic hardship, a situation that increases stress in society, which has a negative effect on the quality of relationships between spouses, and ultimately the divorce rate increases (Fischer & Liefbroer, 2006).
Method
Is divorce affected by economic factors such as the unemployment rate and inflation? The present study also examines the issue that the greater participation of women in the labor market in society means a higher tendency to divorce. The research is modeled using the structural equation model (SEM) and estimated by the 2SLS method. A structural equation model is constructed to simultaneously estimate an equation for marriage dissolution and an equation for the average age of women at first marriage, because there is a simultaneous effect between these two variables. The system of equations is specified as follows (2 and 3).
CDRt=α0+α1 FEt+α2 UNt+α3 CPIt+U1t (2)
MAFMWt=β0+β1 FEt+β2 PADt+U2t (3)
The current research seeks to explain the divorce process in Iran and the impact of economic and social variables on the phenomenon. So, it is optional to consider complete demographic and socio-economic model. Therefore, the explanatory variables in the divorce rate equation and the average age of women for the first marriage have been considered. Their nature, i.e., endogenous and exogenous, has been determined. The raw divorce rate variables (CDR), the average age of women at first marriage (MAFMW), and the share of women’s employment in the labor market (FE) are considered exogenous variables, the data of which were collected from the Iranian Statistics Center. Other variables, like inflation based on the consumer price index (CPI), unemployment rate (U), its statistics from the Central Bank of Iran, and the age difference of the couple at the first marriage (PAD), whose information is collected from the Iranian Statistics Center, are exogenous and predetermined variables. The studied period includes 1370-1400 (1991-2021). Also, the logarithm of the variables has been used in estimating the model.
Findings
After determining the instrumental variables, the coefficients were estimated using the 2SLS method, and the results are reported in Tables (2 and 3). The result of 2SLS estimation for the divorce rate in the table above (2) shows that women’s employment has a significant positive effect in explaining the dynamics of divorce. In other words, higher levels of women’s activity as a labor force increases the probability of divorce. The effect of the unemployment rate and inflation is also significant; the coefficients equals 0.705 and 0.143, respectively (Table 2). Therefore, it can be concluded that the dire economic situation causes an increase in divorce in society. Also, the obtained results support the hypothesis that economic shocks or disturbances cause the spread of divorce in society. The relationship between other variables with divorce can be seen, here.
Table 1: Results equation 2 (Crude divorce rate)
| Prob | t-Statistic | Std. Error | Coefficient | Variable |
| 0.000 | 7.010 | 0.106 | 0.744 | FE |
| 0.008 | 2.840 | 0.247 | 0.705 | U |
| 0.002 | 3.340 | 0.042 | 0.143 | CPI |
| 0.252 | -1.170 | 0.686 | 0.805- | C |
Source: Author’s calculations
Table 2: Results equation 2 (Crude divorce rate)
| Prob | t-Statistic | Std. Error | Coefficient | Variable |
| 0.000 | 6.680 | 0.037 | 0.253 | FE |
| 0.000 | -4.330 | 0.058 | -0.252 | U |
| 0.000 | 48.460 | 0.070 | 3.240 | C |
Source: Author’s calculations
Discussion
The 2SLS estimation results for the crude divorce rate shown (Tables 2 and 3) show that women’s participation in the labor market significantly affects divorce dynamics. These results support the view that financial security is a decisive determining factor in the spread of divorce. However, it should be noted that a part of it can be explained through the existence of divorce between spouses; that is, before the employment of women, there was a divorce issue between spouses, which manifests itself when the woman is employed in the labor market, or if the woman is employed when it occurs. The problem between couples is that women’s financial dependence is not an obstacle to divorce. Unemployment and inflation also have a significant effect on the divorce process. This shows that the economic situation at the level of society affects the increase in the dissolution of the marriage between couples. Therefore, one of the essential and influential dimensions in increasing the divorce rate in Iran is the chaotic economic situation in the last few decades.
Ethical considerations
Authors’ contributions
All authors contributed in designing, running, and writing all parts of the research.
Funding
No direct financial support was received from any institution or organization for the preparation of this article.
Conflicts of interest
This article does not overlap with other published works of the authors.
Following the ethics of research
In this article, all rights related to research ethics have been respected.
Type of Study: orginal |
Received: 2022/11/18 | Accepted: 2023/05/10 | Published: 2023/08/15
Received: 2022/11/18 | Accepted: 2023/05/10 | Published: 2023/08/15
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