Abstract
In this paper we examine the relationship between business cycle fluctuations and family formation and structure, using Canadian vital statistics and Labour Force Survey data. Similar to US studies, we find that a 1 percentage point increase in the unemployment rate of men is associated with a 13 % decline in the number of marriages formed per thousand single females each quarter. Unlike US studies, we do not find a significant relationship between unemployment rates and aggregate flows into divorce. Using stock measures of marital status and family type, we show that the importance of the business cycle varies substantially by age group. Among 25–44 year olds, there is a significant increase in single parents with children under 18 when unemployment rates rise. Among 35–54 year olds, there is a significant increase in those living alone. There is some evidence of elderly parents joining the households of 45–54 year olds and young adults (18–24) remaining with their single parents during recessions. Overall, the observed decline in marriages during recessions appears driven by a decline in remarriages rather than a decline in first marriages.
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