More or less unmarried. The impact of legal settings of cohabitation on labor market outcomes

Abstract: We evaluate the impact of legal settings of unmarried cohabitation on labor market outcomes for men and women. In Canada, cohabiting couples are automatically entitled to certain rights after a few years of cohabitation. In some provinces, ex-cohabiting partners can claim for alimony upon separation, in others they are granted similar rights and responsibilities as married couples. Using cross-province variations in legal settings and minimum duration for eligibility, we show that unmarried cohabiting women decrease their labor force supply and earnings when becoming eligible to a more protective cohabitation regime. By contrast, we find that men increase their labor force supply and earnings when becoming eligible to a marriage-like regime of cohabitation. Our results contribute to the ongoing public debate regarding the legal recognition and level of protection that should be given to unmarried cohabiting partners.