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Efficiency in Marriage

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Author Info
Shelly Lundberg ()
Robert Pollak ()

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Abstract

Economists usually assume that bargaining in marriage leads to efficient outcomes. The most convincing rationale for this assumption is the belief that efficient allocations are likely to emerge from repeated interactions in stationary environments, and that marriage provides such an environment. This paper argues that when a current decision affects future bargaining power, inefficient outcomes are plausible. If the spouses could make binding commitments–in effect, commitments to refrain from exploiting the future bargaining advantage–then the inefficiency would disappear. But spouses seldom can make binding commitments regarding allocation within marriage. To investigate the efficiency of bargaining within marriage when choices affect future bargaining power, we consider the location decisions of two-earner couples. Initial location decisions are transparent and analytically tractable examples of choices likely to affect future bargaining power, but the logic of our analysis applies to many other decisions. For example, decisions about education, fertility, and labor force participation are also potential sources of inefficiency. Copyright Kluwer Academic Publishers 2003

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File URL: http://hdl.handle.net/10.1023/A:1025041316091
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Publisher Info
Article provided by Springer in its journal Review of Economics of the Household.

Volume (Year): 1 (2003)
Issue (Month): 3 (September)
Pages: 153-167
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Handle: RePEc:kap:reveho:v:1:y:2003:i:3:p:153-167

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Related research
Keywords: marriage migration efficiency household bargaining limited committment

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December. [Downloadable!] (restricted)
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  2. Junsen Zhang & William Chan, 1999. "Dowry and Wife's Welfare: A Theoretical and Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 786-808, August. [Downloadable!] (restricted)
  3. Konrad, K.A. & Lommerud, K.E., 2000. "The Bargaining Family Revisited," Norway; Department of Economics, University of Bergen 212, Department of Economics, University of Bergen.
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  4. Peters, H Elizabeth, 1986. "Marriage and Divorce: Informational Constraints and Private Contracting," American Economic Review, American Economic Association, vol. 76(3), pages 437-54, June.
  5. Ethan Ligon, 2002. "Dynamic bargaining in households (with application to Bangladesh)," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series 972, Department of Agricultural & Resource Economics, UC Berkeley. [Downloadable!]
  6. Lundberg, Shelly & Pollak, Robert A, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-58, Fall. [Downloadable!] (restricted)
  7. Lundberg, Shelly & Startza, Richard & Stillman, Steven, 2003. "The retirement-consumption puzzle: a marital bargaining approach," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1199-1218, May. [Downloadable!] (restricted)
  8. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Melvyn G. Coles & Marco Francesconi, 2007. "On the Emergence of Toyboys: Equilibrium Matching with Ageing and Uncertain Careers," IZA Discussion Papers 2612, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Raquel Fernandez & Alessandra Fogli & Claudia Olivetti, 2002. "Marrying Your Mom: Preference Transmission and Women's Labor and Education Choices," NBER Working Papers 9234, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Marina Della Giusta & Maria Laura Di Tommaso & Steinar Strøm, 2005. "Who’s watching? The market for prostitution services," CHILD Working Papers wp16_05, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY. [Downloadable!]
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  4. Murat Iyigun, 2005. "Bargaining and Specialization in Marriage," IZA Discussion Papers 1744, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Chen, Natalie & Conconi, Paola & Perroni, Carlo, 2006. "Does Migration Empower Married Women?," CEPR Discussion Papers 5559, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. repec:ese:iserwp: is not listed on IDEAS
  7. Francesconi, Marco & Muthoo, Abhinay, 2003. "An Economic Model of Child Custody," IZA Discussion Papers 857, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Robert A. Pollak, 2007. "Family Bargaining and Taxes: A Prolegomenon to the Analysis of Joint Taxation," IZA Discussion Papers 3109, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Valerie Lechene & Martin Browning & Pierre-Andre Chiappori, 2004. "Collective and unitary models: a clarification," Economics Series Working Papers 191, University of Oxford, Department of Economics. [Downloadable!]
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  10. Liliana E. Pezzin & Robert A. Pollak & Barbara S. Schone, 2006. "Efficiency in Family Bargaining: Living Arrangements and Caregiving Decisions of Adult Children and Disabled Elderly Parents," NBER Working Papers 12358, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Amihai Glazer, 2008. "Social security and conflict within the family," Journal of Population Economics, Springer, vol. 21(2), pages 331-338, April. [Downloadable!] (restricted)
  12. Helmut Rainer, 2004. "Gender Discrimination and Effciency in Marriage: the Bargaining Family under Scrutiny," Economics Discussion Papers 586, University of Essex, Department of Economics. [Downloadable!]
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  13. Janice Compton & Robert A. Pollak, 2004. "Why Are Power Couples Increasingly Concentrated in Large Metropolitan Areas," NBER Working Papers 10918, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Helmut Rainer, 2003. "Should We Write Prenuptial Contracts?," Economics Discussion Papers 572, University of Essex, Department of Economics. [Downloadable!]
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  15. Fernandez, Cristina & Sevilla-Sanz, Almudena, 2006. "Social norms and household time allocation," IESE Research Papers D/648, IESE Business School. [Downloadable!]
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  16. Robert A. Pollak, 2005. "Bargaining Power in Marriage: Earnings, Wage Rates and Household Production," NBER Working Papers 11239, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Kristian Orsini & Amedeo Spadaro, 2006. "Strategic weight within couples: a microsimulation approach," PSE Working Papers 2006-32, PSE (Ecole normale supérieure). [Downloadable!]
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  18. Shelly Lundberg & Robert A. Pollak, 2007. "The American Family and Family Economics," IZA Discussion Papers 2715, Institute for the Study of Labor (IZA). [Downloadable!]
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