I assess the long‐run implications for children of growing up in a unilateral divorce environment, which increases the ease of divorce by not requiring the explicit consent of both partners. Using 40 years of census data to exploit the variation across states and over time in changes in divorce regulation, I confirm that unilateral divorce regulations do significantly increase the incidence of divorce. Adults who were exposed to unilateral divorce regulations as children are less well educated, have lower family incomes, marry earlier but separate more often, and have higher odds of adult suicide

This article examines the extent to which agency theory may explain chief executive officer (CEO) compensation in Chinese state‐owned enterprises during the 1980s. We find support for the agency theory: CEO pay sensitivity decreases with the variance of performance. Moreover, the performance sensitivity of CEO pay increases with the marginal return to executive action. While the elasticity of pay to sales is slightly smaller than that found for conventional firms in the West generally, our estimate of the semielasticity of pay with respect to profitability is comparable with estimates for regulated industries in the United States