The Dynamics of Abusive Relationships

Abstract
Domestic abuse encompasses a range of damaging behaviours beyond physical violence, including economic and emotional abuse. This paper provides the first evidence of the impact of cohabiting with an abusive partner on victims' economic outcomes. In so doing, we highlight the systematic role played by economic suppression in such relationships. Using administrative data and a matched control event study design, along with a within-individual comparison of outcomes across relationships, we document three new facts. First, women who begin relationships with (eventually) physically abusive men suffer large and significant earnings and employment falls immediately upon cohabiting with the abusive partner. Second, abusive men impose economic costs on all their female partners, even those who do not report physical violence. Third, this decline in economic outcomes is non-monotonic in women's pre-cohabitation outside options. To rationalize these findings, we develop a new dynamic model of abusive relationships where women do not perfectly observe their partner's type, and abusive men have an incentive to use economic suppression to sabotage women's outside options and their ability to later exit the relationship. We show that this model is consistent with all three empirical facts. We harness the model's predictions to revisit some classic results on domestic violence and show that the relationship between domestic violence and women's outside options is crucially linked to breakup dynamics.