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Divorce and Housing Cost Shocks in Mexico

Andres Jauregui et al.

Economia, the Journal of Latin American and Caribbean Economic Association (LACEA)2025https://doi.org/10.31389/eco.444article
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Abstract

Economic explanations of divorce are centered on the idea that individuals make marital decisions based on potential financial benefits. This paper aligns with this perspective and extends a growing literature on the impact of housing cost shocks on divorce rates (Rainer and Smith, 2010; Farnham et al., 2011; Harknett and Schneider, 2012; Klein, 2017) by analyzing the impact of unexpected housing cost shocks on Mexico’s divorce rates over the past 15 years. This research presents two novel contributions. Firstly, it focuses on Mexico, where factors such as economic informality, family networks, inequality, and migration shape individuals’ marital calculations distinctly from those of more economically developed countries. Secondly, life circumstances, specifically the duration of marriage and socioeconomic status, are tested to see how they moderate individuals’ reactions to unexpected housing cost changes. Utilizing newly compiled state-level data, the findings of this study underscore the importance of context. Notably, the duration of marriage emerges as a critical factor in how individuals respond to unexpected housing cost shocks. Consistent with the literature, unexpected positive housing cost shocks are found to stabilize marriages (Klein, 2017), particularly for marriages of longer duration. In contrast, unexpected negative housing cost shocks do not have a statistically significant impact on divorce rates in Mexican states. As hypothesized, couples with lower socioeconomic status demonstrate a higher propensity to divorce during unexpected positive housing cost shocks. JEL Classification Code: D1

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https://doi.org/https://doi.org/10.31389/eco.444

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@article{andres2025,
  title        = {{Divorce and Housing Cost Shocks in Mexico}},
  author       = {Andres Jauregui et al.},
  journal      = {Economia, the Journal of Latin American and Caribbean Economic Association (LACEA)},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.31389/eco.444},
}

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Divorce and Housing Cost Shocks in Mexico

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