Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly Formed Partnerships

This article analyses the effect of a reform granting alimony rights to cohabiting couples in Canada. A collective household model with a matching framework predicts that changes in alimony laws would affect existing couples and couples-to-be differently. For existing couples, it benefits the intended beneficiary but, for couples not yet formed, it generates offsetting intra-household transfers and lower intra-marital allocations for the beneficiary. Our empirical analyses confirm these predictions. Among couples united before the reform, obtaining the right to petition for alimony led women to lower their labour force participation but not among newly formed cohabiting couples.