Does cohabitation prior to marriage raise the risk of marital dissolution and does this effect vary geographically?

A number of studies show that premarital cohabitation increases the risk of subsequent marital dissolution. Some argue that this is a consequence of selection effects and that once these are controlled for premarital cohabitation has no effect on dissolution. We extend this research by examining whether the effects of premarital cohabitation on marital dissolution vary across settlements within a country. Using retrospective event-history data from Austria, we model equations for union formation and dissolution jointly to control for unobserved selectivity of cohabiters or non-cohabiters. Our results show that those who cohabit prior to marriage have a higher risk of marital dissolution. However, once selection effects are controlled for, the risks of marital dissolution for those who cohabit prior to marriage are significantly lower than for those who marry directly. We show that strong selection effects relate to both cohabitation and direct marriage and these effects are consistent across all settlements.