Labour market and financial consequences of divorce and separation

Divorce and separation may have different consequences for the economic well-being of the former partners, depending on their resources, opportunities, constraints, and coping strategies. The most common outcome is the deterioration of financial circumstances, especially for women and mothers. However, the post-separation financial situation may also be improved by intensifying participation in the labour market. The main objective of the paper is to analyse how the financial and employment situation of women and men change after partnership dissolution in Hungary in the short and middle term. We use data from the five longitudinal waves of the Hungarian Generations and Gender Survey (2001–2016/2017) and we look at change between pairs of consecutive waves. We focus on women and men who had lived with a spouse or partner in one survey wave and this relationship dissolved by the next wave. Only respondents aged below 60 are analysed. We use various measures of financial and employment situation and strategies that may help cope with income loss. We look at parents and non-parents, as well as divorce from marriage and separation from an unmarried union separately. Results indicate that partnership dissolution in Hungary is associated primarily with deterioration in household-level economic wellbeing – especially among mothers –, while labour market adaptation, such as employment entry or increased working hours, appears more common among women than men. The findings also suggest that partnership dissolution may create opportunities for occupational advancement, but mainly for the childless.