‘Take the Money and Run’: Dutch Evidence on Inheritance and Transfer Receiving and Divorce

Abstract

AbstractThis paper aims to investigate whether a wealth endowment, such as an inheritance or a gift, can increase the chances of getting divorced, using Dutch panel data for the period from 2002 to 2016. According to the literature, different factors may lead to the breakdown of a marriage; however, the role played by inherited wealth has never been explored so far. Starting from the idea that the receipt of an inheritance might have an impact on various aspects of an individual’s life, estimations of a Cox proportional hazard ratios model are performed and tests are carried out to establish which variables, with particular attention being given to inherited wealth, act as drivers in increasing the chances of withdrawing from a marriage. The findings suggest that when the wealth endowment has been received by the wife, this increases the chances of the couple separating. This signals that receiving an inheritance/gift changes the bargaining power between the couple: for the husband, it does not represent an incentive to divorce, while the results suggest that the wife might perceive a change in the bargaining power, increasing the likelihood of marital disruption.