Divorce Law Reform, Family Stability, and Children’s Long-Term Outcomes

While divorce laws are known to influence family behavior, empirical evidence of their effects on children remains scarce. I shed more light on this by evaluating a 6-month parental reconsideration period for divorce, which was implemented during the Swedish divorce law reform of 1974. I exploit quasi-experimental policy variation and population-wide register data on 1.17 million Swedish children born 1952–1964 to evaluate the implications of family stability on children’s long-term human capital outcomes. I find that families with more years of exposure to this divorce restriction are 18.8% less likely to divorce. The children with greater exposure are also 1.8% more likely to graduate from upper secondary school and exhibit higher rates of marriage and lower rates of divorce in adulthood. The findings highlight a trade-off between parental freedom of choice related to divorce and externalities on children’s outcomes.