We investigate the fake divorce activities associated with the home-buying restriction policy in China. We find that the policy increased divorce rate (marriage restoration rate) in the treated cities by 0.436 (0.195) permillage point relative to the control cities. This explains a 19.9% increase in the overall national divorce rate, of which at least 45% can be interpreted as fake divorces. Moreover, we find that the main responders to this policy are people who are older, childless, less-educated, and wealthier. Finally, we show that the fraudulent behavior has significant implications for market efficiency, intra- and inter-household wealth inequality, and other consequences.

This content is only available as a PDF.

Article PDF first page preview

Article PDF first page preview

Supplementary data

You do not currently have access to this content.