Demanding financial self-sufficiency after divorce: understanding the consequences of the 2008 Alimony Reform

Abstract

In this paper, we examine whether and to what extent the 2008 Alimony Reform in Germany had an impact on alimony, its likelihood of payment, and cooperation between former spouses. In 2008, financial self-responsibility was imposed on divorcees by limiting post-marital alimony. By estimating panel event models and exploiting the German Tax Payer Panel, we show a significant decline in the likelihood of alimony payment and cooperation for tax purposes after separation. Moreover, the alimony amount was significantly reduced, thus, demonstrating an important redistribution effect of the 2008 Reform. The financially better-off individuals – mainly men – significantly benefited at the expense of their former spouses.