![Sample our Social Sciences journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/110822/TOC-Subject-Sample-2021-Social-Sciences.jpg"})
ABSTRACT
Research in behavioral economics suggests that a cooling-off period can address decision-making errors caused by projection bias, which drives people to make the wrong prediction when affected by an immediate emotional state. Using the unique, natural experiment of a mandated divorce cooling-off period in Korea, a difference-in-differences (DD) estimation of the impact of such a cooling-off period on divorce outcomes shows that the cooling-off period increases filing cancellation and reduces finalized divorce rates without any effect on initial divorce filing rates. Estimates indicate that the number of divorces finalized decreases by approximately 9 percent, and that this effect is consistent over the long run. Research also shows that couples who have undergone a prior separation period or have conclusive causes to divorce do not respond to the cooling-off period, suggesting that emotional state at the time of decision is the driving force of observed dynamic inconsistency.
NOTES ON CONTRIBUTORS
Dainn Wie is Assistant Professor of Economics at the National Graduate Institute for Policy Studies in Japan, visiting research fellow of Asiatic Research Institute of Korea University, and a non-staff economist for Asian Development Bank. Her research area is applied microeconomics, labor economics, and gender inequality.
Hyoungjong Kim is a PhD candidate in Economics at Korea University, where he is writing his thesis under the guidance of Chirok Han. His current research interests focus on the development and software implementation of quantitative methods in panel econometrics. He is also interested in gender economics, big data analysis, corporate finance, and demographic transition.
ACKNOWLEDGMENTS
We thank Lawrence F. Katz and Richard Freeman, who gave us wonderful comments during the Labor Economics Seminar at Harvard University on April 1, 2009. We also appreciate comments we received at the Applied Microeconomics Seminar held at the Institute of Social Science, University of Tokyo on October 5, 2012.
Notes
1 The present study only focuses on marriage and divorce among heterosexual couples.
2 We tested whether the impact of the cooling-off period differs by women's employment status and education, but could not find any significant differences. These results are not included in this article and can be provided upon request.
3 The right of rescission period is a provision under the Truth in Lending Act (TILA) of 1968. This US federal law provides homeowners who are refinancing their homes with a chance to reconsider their options before committing to the new loan terms.
4 Currently, every condominium purchase in Florida is subject to a rescission period as defined in the provision under Chapter 718 of the Florida Statute, the “Condominium Act.”
5 In the US, under the rules of the Securities Act of 1933, modified in June 2005, the quiet period refers to the period from when a company files a registration statement with the US Securities and Exchange Commission until the SEC declares the registration statement effective. During that period, a company making an IPO and relative parties are limited from releasing information to the public.
6 In 2008, the Civil Code was revised to require people who file for mutually consented divorce to submit agreement about parental rights and child custody. Details can be found at Korea Legal Aid Center for Family Relations (http://newfl.or.kr).
7 These two district courts are the Seoul Family Court and the Daejeon Family Branch Court. The Seoul Family court is the fourth largest of fifty-four jurisdictions in Korea.
8 In the US, some states have divorce cooling-off periods while other states do not. Also, among the states that have a cooling-off period, this period can range anywhere from three months to two years, with some options depending on the existence of children and consent.
9 Appendix Figure S1 is available in the supplemental tab on the publisher's website.
10 In Korea, the legal age of adulthood is 20 years.
11 Paragraph 2 of Article 836 of the Civil Code requires a three-month cooling-off period for couples with minor children and a one-month cooling-off period, otherwise. The law also mandates that couples submit written agreements on child custody and alimony.
12 Appendix Table S1 is available in the supplemental tab on the publisher's website.
13 In general, if a filing were submitted in the morning, the couple would receive an official divorce certificate in the afternoon. If a filing were submitted in the afternoon, the couple would receive their certificate the next day.
14 For example, the state of Minnesota legislated mandatory divorce education in 2000 (Statute on Domestic Relations, Section 518.157).
15 We used data collected from 2000 to 2009 because there was a slight change before and after 2000 in the data collection method. We also used this data because the divorce cooling-off period was adopted fairly recently, and we wanted to avoid measuring any other confounding effect.
16 We obtained the monthly population of each jurisdiction from population surveys.
17 Our result is robust when we identified couples’ jurisdiction by husband's address.
18 Filing cancellation data is confidential and not publicly available. We appreciate the generous support of the Supreme Court of Korea for our research.
19 We acquired the same robust results even when we extended sample period to the whole period.
20 This result is not reported in the article, but can be provided upon request.