Testing Nash-bargaining household models with time-series data

John Hoddinott, Christopher Adam
fcnd discussion paper

This paper uses a “natural experiment” in Canadian divorce law reform to discriminate empirically between unitary and Nash-bargained models of the household. Using time-series data from three Canadian provinces, it demonstrates that following landmark divorce law reforms in the 1970s—reforms that led to improvements in women's expected settlement upon divorce in Ontario and British Columbia, suicide rates for older, married women in these provinces registered a sharp decline. Similar declines were not registered for younger, unmarried women or men in Ontario and British Columbia, nor for older, married women in Quebec, where the legal basis for divorce did not change. These results are consistent with Nash-bargained models of the household but not with the unitary model.