Union dissolution is a widespread lifecourse event that can trigger a substantial income shock to individuals experiencing it, especially if there are dependent children in the family. The large literature shows that after separation women experience a sharper decline in income and a greater poverty risk, while men, in contrast, may even improve their standard of living. This paper is aimed at assessing the impact of intrahousehold inequality on financial consequences of union dissolution for men and women and the role of European tax-benefit systems in moderating the adverse impacts of union dissolution on gender income inequality. Our methodological approach consists of using microsimulation techniques in combination with the survey data. To capture the pre-separation income situation of men and women, we construct measures of individual income assuming minimum income pooling in addition to the conventional complete pooling and equal sharing approach. In order to assess the impact of separation on gender inequality, we create a counterfactual scenario by splitting all heterosexual couples in our data and simulating all benefits and taxes that each individual would be entitled to if they lived in separate households. We sensitivity test the results by assuming different scenarios of sharing custody of the dependent children. Our results show that the assumptions about income pooling within household have significant impacts on the assessment of gender income inequality after a union dissolution.
Presented by:
Silvia Avram and Daria Popova
Date & time:
May 18, 2022 11:30 am - May 18, 2022 12:30 pm
Venue:
Hybrid event: room 5B.24 & remotely via Zoom - contact the series organisers (at iserseminars@essex.ac.uk) if you do not have the link.
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