Should There be a System of Alimony for Unmarried Couples who Separate?
The article "Covering the Costs of Divorce: The Role of the Family, the State and the Market" analyses the economic risk associated with divorce, and public and private coverage of this risk. The authors mention, furtively but at least three times, that the risk they are discussing applies to unmarried as much as to married couples. And indeed, the various divorce related costs evoked by the authors also exist for unmarried couples who separate (though the amounts involved may be different) Living standards drop because economies of scale are smaller after separation; human capital is lost because of specialization in domestic labour prior to the break up (leading to reduced employability and a smaller pension for one of the partners) there are collective costs in terms of child poverty owing to reduced living standards (with a longterm impact in terms of aggregate human capital) there are also costs linked to gender inequality, and procedural expenses.(1) So if the risks are of a similar nature, one would expect the state to offer the same instruments for covering them, regardless of marital status. And in fact it does so in several respects. For example, welfare benefits for lone parents and people on low incomes, back to work incentives, child support guidelines, family provisions in pension entitlements and some family based tax benefits do not depend on marital status. So why, then, is alimony reserved for married couples only?To address this question, we use the same economic reasoning as the article.(2) If we consider that alimony is intended to cover basic needs, in that the separation penalizes one of the former partners in economic terms, even to the point where he or she (and the child or children) risks falling into poverty, then nothing justifies reserving alimony for married couples alone. We can draw a parallel here with child support, which applies to both unmarried and married parents, since the couple's break up in no way affects the parents' responsibility for their children's maintenance and education.The question is more complex if we see alimony as compensation, and the union as a contract. When the union is formed, or when the partners make decisions later on, they establish a long term contract under which the partner who, in the early part of their life together, specializes in domestic production (mainly child rearing) and so invests less in the labour force, will profit from their investment later in life by benefitting from the other partner's employment income (current or future) In the event of a break up, the partner who has invested in domestic labour should be indemnified because the union has not lasted long enough for him or her to reap the fruits of their investment.(r) Can this reasoning be applied regardless of marital status?Is specialization (and its consequences) specific to married couples?From a theoretical standpoint, the answer is certainly "No" The theory of specialization in the model of family economics devised by Gary Becker makes no hypothesis about marital status. From an empirical and descriptive standpoint, some studies show that such specialization exists in unmarried couples, though to a lesser extent than in married couples (Baxter, 2004; Craig and Mullan, 2010; South and Spitze, 1994) From an empirical and analytical standpoint, however, we know of no studies that have analysed the impact of conjugal status (married versus unmarried) on the human capital (wage rate) of individuals living in couples.Instead, the literature studies the effect of being married or unmarried in comparison to being single. The most recent literature on this subject shows that there is a (slight) marriage premium for men and an even slighter (or nonexistent) premium for men in unmarried couples (Barg and Beblo, 2009; Cohen, 2002; Datta Gupta and Smith, 2002; Datta Gupta et al. 2007; Dougherty, 2006; Killewald and Gough, 2013; Mamum, 2012; Pollmann Schult, 2011; Taylor and Bardasi, 2008)