The Effect of Divorce Costs on Marriage Formation and Dissolution
AbstractExploiting the theoretical parallels between the matching of workers to jobs in the labour market and the matching of individuals in the marriage market, we use a search theoretic model of marriage formation and dissolution to examine the effect of divorce costs on both decisions. By introducing learning at both stages of the marital decision process, we show that divorce costs not only affect the probability of divorce but also the probability of marriage. Interestingly, to what extent divorce costs affect the marital status distribution depends on the information regarding the quality of the potential marriage that individuals receive while encountering marital offers.
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Bibliographic InfoPaper provided by Economics and Finance Section, School of Social Sciences, Brunel University in its series Economics and Finance Discussion Papers with number 97-05.
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Postal: Brunel University, Uxbridge, Middlesex UB8 3PH, UK
Other versions of this item:
- Spiros Bougheas & Yannis Georgellis, 1999. "The effect of divorce costs on marriage formation and dissolution," Journal of Population Economics, Springer, vol. 12(3), pages 489-498.
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
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