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Why Divorce Laws Matter: Incentives for Noncontractible Marital Investments under Unilateral and Consent Divorce

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  • Abraham L. Wickelgren

Abstract

The Coase Theorem suggests that married couples will divorce if and only if doing so increases their joint surplus, regardless of the legal rules governing divorce. This does not mean, however, that divorce laws only affect the distribution of rents. Because the distribution of rents affects each spouse's incentives for noncontractible investments, divorce laws can affect the joint welfare of the couple. This article analyzes the effects of the consent divorce regime and the unilateral divorce regime on incentives for selfish and cooperative marital investments. Using these results, the article demonstrates how endogenous choice of marriage with noncontractible investments can explain some recent empirical results concerning the effects of the shift from consent divorce to unilateral divorce. (JEL C78, D1, D23, J12, J18, K3, K36) The Author 2007. Published by Oxford University Press on behalf of Yale University. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • Abraham L. Wickelgren, 2009. "Why Divorce Laws Matter: Incentives for Noncontractible Marital Investments under Unilateral and Consent Divorce," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 25(1), pages 80-106, May.
    • Handle: RePEc:oup:jleorg:v:25:y:2009:i:1:p:80-106
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    File URL: http://hdl.handle.net/10.1093/jleo/ewm050
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    Citations

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    Cited by:

    1. Leturcq, Marion, 2012. "Will you civil union me? Taxation and civil unions in France," Journal of Public Economics, Elsevier, vol. 96(5), pages 541-552.
    2. Matthias Fahn & Ray Rees & Amelie Wuppermann, 2016. "Relational contracts for household formation, fertility choice and separation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(2), pages 421-455, April.
    3. Matthias Fahn & Ray Rees, 2011. "Household Relational Contracts for Marriage, Fertility and Divorce," CESifo Working Paper Series 3655, CESifo.
    4. Hiller, Victor & Recoules, Magali, 2013. "Changes in divorce patterns: Culture and the law," International Review of Law and Economics, Elsevier, vol. 34(C), pages 77-87.
    5. Alessandro Cigno, 2011. "The Economics of Marriage," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 28-41, May.
    6. Eric Langlais, 2009. "On unilateral divorce and the "selection of marriages" hypothesis," Working Papers hal-04140886, HAL.
    7. Fahn, Matthias, 2011. "Three Essays on Commitment and Information Problems," Munich Dissertations in Economics 13750, University of Munich, Department of Economics.
    8. Alessandro Cigno, 2014. "Is Marriage as Good as a Contract?," CESifo Economic Studies, CESifo, vol. 60(3), pages 599-612.
    9. Cigno, A., 2016. "Conflict and Cooperation Within the Family, and Between the State and the Family, in the Provision of Old-Age Security," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 609-660, Elsevier.
    10. Langlais, Eric, 2009. "On unilateral divorce and the "selection of marriages" hypothesis," MPRA Paper 14368, University Library of Munich, Germany.
    11. Alessandro Cigno, 2012. "Marriage as a commitment device," Review of Economics of the Household, Springer, vol. 10(2), pages 193-213, June.
    12. Bac, Mehmet, 2016. "The expectation effect of a fall in divorce costs," International Review of Law and Economics, Elsevier, vol. 47(C), pages 41-47.
    13. Hanlon Michael, 2012. "Stealing within Marriage: Differences across Divorce Laws," Review of Law & Economics, De Gruyter, vol. 8(1), pages 161-179, May.
    14. J. Gimenez-Nadal & Jose Molina, 2013. "Parents’ education as a determinant of educational childcare time," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 719-749, April.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D1 - Microeconomics - - Household Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • K3 - Law and Economics - - Other Substantive Areas of Law
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law

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