Labor supply and the welfare costs of marital conflict

Marital conflicts can have negative welfare consequences. In this paper we use an equivalence scale approach to analyze the household labor supply and welfare effects of marital conflict. It might be assumed that there is a simultaneous relation between labor supply and marital conflict: increased labor force participation of women may increase marital conflict, while spouses may adjust their labor supply because of marital conflict. The empirical results show that such a simultaneous relation exists. Women who participate in the labor market have more conflicts about the division of household tasks and the care of children than non-participating women. On the other hand, marital conflicts cause women to reduce their labor supply. Finally, it is found that the welfare losses due to marital conflict are substantial.