The Effect of Changing Financial Incentives on Repartnering∗

Abstract

This article examines how a reduction in the financial resources available to lone parents affects repartnering. We exploit an Australian natural experiment that reduced the financial resources available to a subset of separating parents. Using biweekly administrative data capturing separations occurring among low- and middle- income couples, we show that the policy reform significantly increased the speed of repartnering for affected separating mothers. The results demonstrate that one way that lone mothers respond to a reduction in financial resources available at the time of relationship breakdown is by repartnering more quickly.