Between Calm and Passion: Cooling-off Periods and Divorce Decision

Starting in 2005, couples who file consented divorces were given waiting periods to re-think their decisions in several jurisdictions in Korea. In this paper, we use lagged adoption of divorce waiting period to examine the effect of divorce waiting periods on divorce filing rates and actual divorce rates. Our empirical results show that actual divorce rates significantly decreased about 8% after the introduction of waiting periods while divorce filing rates remained constant. We suggest that projection bias in divorce decisions is an explanation for our findings. If people have projection bias, their decision to divorce will be highly affected by the emotional state they are in when they file for divorce. And as they realize that projection bias influenced their decision during the waiting period they would eventually cancel their divorce, thereby lowering the actual divorce rate. Our empirical findings correspond to the predictions of projection bias theory and also suggest that a "cooling-off" policy can actually contribute to reducing sub-optimal decisions caused by projection bias.