The long-term consequences of unilateral divorce laws on savings of European households

Unilateral Divorce Laws (UDLs) allow people to obtain divorce without the consent of their spouse. Using the staggered introduction of UDLs across European countries, we show that households exposed to UDLs for longer time accumulate more savings. This effect holds for both financial and total wealth and is stronger at higher quantiles of the wealth distribution. Consistently with a precautionary motive for savings, we also find that longer exposure to UDLs increases female labour market participation and financial literacy.