samlet årgang - Økonomisk Institut - Københavns Universitet

TWO TESTS OF DIVORCE BEHAVIOUR ON DANISH MARRIAGE MARKET DATA 427
vails after endogenising the premarital cohabitation decision. As argued previously,
our identification strategy is perhaps not the most powerful. Still the empirical model
suggests that endogenising premarital cohabitation improves the fit of the model. A
likelihood ratio test of the preferred model (Table 3) against a model where premarital
cohabitation is not endogenised supports the first model. The LR statistics has a value
of 13.96, the 95% critical value in the 2 -distribution with 4 degrees of freedom is
9.48. In addition the correlation between the two processes is estimated to be positive, 3
suggesting that individuals who cohabit prior to marriage have unobserved characteristics
that make them more prone to divorce. This is in accordance with the selection
effect suggested previously. However, the learning effects dominate the selection effect
and premarital cohabitation is supporting longer marriages. Also, the longer the premarital
cohabitation period has lasted the more stable is the subsequent marriage. 4 The
results differ from practically all other studies in this field (see e.g. Blanc (1985) on
Norwegian data, Balakrishnan et al. (1987) on Canadian data, Bennett et al. (1988),
Trussell et al. (1992), and Hoem and Hoem (1992) all on Swedish data, Bracher et al.
(1993) on Australian data, Lillard et al. (1995), Weiss and Willis (1997), and Brien et al.
(2001) all on US data). 5 One of the main reasons for the divergence from the other studies
is presumably the period which the data sets covers. This study is based on more
recent data and in the present context this could be quite important. According to
Kiernan (2000), cohabitation was largely statistically invisible prior to the 1970s.
However, the form of cohabitation that we consider in this paper, i.e. cohabitation as a
prelude to marriage, »...came to the fore during the 1960s in Sweden and Denmark,
and during the 1970s in other Northern and Western European countries, North America,
and Australia and New Zealand...« Kiernan (2000, p. 42). Contemporarily premarital
cohabitation is the norm in a number of countries like the US, the UK, Norway,
3. It should be noted that the correlation is perfect. Due to the small amount of individuals with repeated
marriage spells the empirical identification of the correlation structure is rather weak. This implies that in a
discrete mixture model with two points of support in each equation I was not able to obtain valid estimates
with out restricting the correlation to be either 1, -1 or 0. The correlation of 1 is however not sensistive
to different starting values and in that sense is a robust finding conditional on the identifying power of the
model.
4. A referee suggested to endogenise time spent as cohabitors. This is clearly a very good point. An obvious
empirical approach would be to model the period of premarital cohabitation as an additional duration process
and then allow for correlation between this and the marriage equation. The main empirical obstacle preventing
me from following this path is that many premarital cohabitation periods are left censored, i.e. the
start before the observation period. Left censored duration data are quite complicated to model. This complexity
increase with the inclusion of unobserved heteregenity, which is required to identify the correlation
between the two processes of interest. Accordingly, it is only the decision to cohabit that is endogenised in
the model.
5. One exception is Georgellis (1996). He finds, based on British data from the General Household Survey
collected in 1990-91, that the duration of premarital cohabitation and subsequent divorce risk is negatively
correlated. He does not take the possible endogeneity of cohabitation into account.