Community property law and cohabitation rates

This research looks at the impact that community property law has on cohabitation rates. The risk ingrained in community property states discourages individuals from marriage promoting cohabitation as an alternative that does not have the same ramifications of the law. By comparing community property law states with common law states using multiple models, the research investigates the correlation of cohabitation and community property law from several angles. Chapter 2 uses cross-sectional data from the Current Population Survey from 1977 to 2011 to view the impact that community property law has on cohabitation rates. The research uses a multinomial logit model to measure the likelihood to cohabit versus marry in the nine community property states and compares it to the rest of the US which utilizes a common law system to determine property ownership within marriage and beyond. In 1977 the impact was large, but it diminished over time until there was no difference between the cohabitation rates of the common law states and the community property states by 2006. The study also applies Akerlof's theory of reputation to show that as the impact that cohabitation has on reputation has lessened so has the difference caused by the community property law. Chapter 3 looks at changes in Wisconsin divorce law as a natural experiment in the effect of law on cohabitation. Wisconsin was the last state to adopt community property law. The research uses a difference in difference approach to study the impact that the adoption had on the cohabitation rate within Wisconsin and compares it with the increase in the cohabitation rate of a group of similar states. The study finds Wisconsin had greater growth of the cohabitation rate than similar states (which did not adopt the same change in law). It concludes that the adoption of the law was followed by an increase in the cohabitation rate greater than what was experienced in similar states.