Marital disruption in Germany: Does the conservative welfare state care? Changes in material well-being and the effects of private and public transfers

This paper analyzes the economic consequences of marital disruption in Germany with data from the German Socio-Economic Panel. Based on partnership dissolutions observed in the years 1984-1999, we find clear gender inequalities among the separating men and women. As a result of the changes in household composition, support payments, employment and residential mobility, women, on average, end up with much lower disposable household incomes than during marriage, especially when taking into account the number of dependents. The data show that own economic activity and public transfers are the main income sources, while support payments from the former spouse play only a minor role. Apparently, a conservative but generous welfare state like Germany attenuates the most severe economic consequences of marital disruption. However, since further increases in public spending are not a viable strategy, public policies to increase female employment are needed to insure women against the economic risks of marriage dissolution.