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An Equilibrium Analysis of Divorce

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Author Info

  • Chiappori, P.A.
  • Weiss, Y.

Abstract

The paper provides a general equilibrium analysis in which individual decisions determine the aggregate divorce rate and are influenced by it. Reinforcement is caused by search frictions and a meeting technology whereby remarriage is more likely if the divorce rate is higher, implying multiple equilibria. Welfare tends to be higher at equilibria with more divorce. This result may be reversed if divorce reduces investments in marriage, e.g., children. The important insight that remains is that, in search markets, a legal policy that enforces voluntary contracts need not be socially optimal, because the presence of rents allows the partners to neglect the interest of prospective spouses whom they may meet in the future.

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Bibliographic Info

Paper provided by Tel Aviv in its series Papers with number 2000-18.

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Length: 46 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:teavfo:2000-18

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Postal: Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.
Phone: 972-3-640-9255
Fax: 972-3-640-5815
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Web page: http://econ.tau.ac.il/research/foerder.asp
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Keywords: DIVORCE ; CHILDREN ; MARITAL STATUS;

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Cited by:
  1. Terra G. Mckinnish, 2004. "Occupation, Sex-Integration, and Divorce," American Economic Review, American Economic Association, vol. 94(2), pages 322-325, May.
  2. John Knowles, 2006. "Why are Married Men Working So Much?," 2006 Meeting Papers 445, Society for Economic Dynamics.
  3. Knowles, John, 2007. "Why Are Married Men Working So Much? Home Production, Household Bargaining and Per-Capita Hours," IZA Discussion Papers 2909, Institute for the Study of Labor (IZA).

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