See the future by looking at the past: predicting divorce with premarital earnings

The effect of spouse's premarital earnings capacity on the probability of divorce is examined. This study is based on longitudinal register data on married and cohabitating couples in Sweden. We use the residuals from estimated earnings equations of men and women based on observations before their marriage in estimation of a logit model of divorce. By using information on individuals as singles, we can identify the impact of relative earnings power on the probability of divorce, per se, without the confounding effect of the marital relationship. The results indicate that differences in spouse's conditional earnings capacities increase the probability of divorce.