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Marriage, Cohabitation and Commitment

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Author Info
Iyigun, Murat () (University of Colorado, Boulder)

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Abstract

This paper combines partner matching with an intra-household allocation model where couples decide if they want to marry or cohabitate. Marriage encourages but does not ensure a higher level of spousal commitment, which in turn can generate a larger marital surplus. Individuals’ marital preferences and commitment costs vary, and sorting equilibria are based on individuals’ marital preferences and propensity to commit. In all equilibria, some married couples are able to cooperate and operate efficiently, but some married and all cohabiting couples act with limited commitment and non-cooperatively. When spousal marital commitment costs are gender symmetric, there is a pure-sorting equilibrium in which all partners who prefer to act with commitment in marriage are matched with someone who has the same preference. In such an equilibrium, the benefits of marital commitment accrue to both partners. When commitment costs are not gender neutral, there can also be mixed-matching equilibria in which a partner who is willing to act with commitment in marriage is matched with someone who is not. In all such equilibria, the benefits of marital commitment accrue only to those men or women who are in short supply. Consequently, a shortage of men (women) who can maritally commit makes all women (men) worse off and materially indifferent between marriage or cohabitation. An excess supply of men who prefer marriage not only reduces the marriage incentives of men and raises those of women, but also the marital commitment incentives of men. As a corollary, if the gains from marriage fall, not only will more individuals choose to cohabitate but more married couples will act non-cooperatively.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4341.

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Length: 47 pages
Date of creation: Aug 2009
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Handle: RePEc:iza:izadps:dp4341

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Related research
Keywords: collective model; intra-household bargaining; modes of partnership choice;

Find related papers by JEL classification:
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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References listed on IDEAS
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  2. Daniela Del Boca & Christopher J. Flinn, 2005. "Household Time Allocation and Modes of Behavior: A Theory of Sorts," IZA Discussion Papers 1821, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Chiappori, Pierre-Andre, 1997. "Introducing Household Production in Collective Models of Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 191-209, February.
    Other versions:
  4. 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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  5. Niko Matouschek & Imran Rasul, 2008. "The Economics of the Marriage Contract: Theories and Evidence," Journal of Law & Economics, University of Chicago Press, vol. 51(1), pages 59-110, 02. [Downloadable!] (restricted)
  6. Michael Peters & Aloysius Siow, 2000. "Competing Pre-marital Investments," Working Papers peters-00-01, University of Toronto, Department of Economics. [Downloadable!]
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  7. Maurizio Mazzocco, 2007. "Household Intertemporal Behaviour: A Collective Characterization and a Test of Commitment," Review of Economic Studies, Blackwell Publishing, vol. 74(3), pages 857-895, 07. [Downloadable!] (restricted)
  8. 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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  9. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February. [Downloadable!] (restricted)
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  10. Matthew J. Baker & Joyce P. Jacobsen, 2003. "Marriage, Specialization, and the Gender Division of Labor," Departmental Working Papers 1, United States Naval Academy Department of Economics. [Downloadable!]
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  11. Hadfield, Gillian K., 1999. "A coordination model of the sexual division of labor," Journal of Economic Behavior & Organization, Elsevier, vol. 40(2), pages 125-153, October. [Downloadable!] (restricted)
  12. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February. [Downloadable!] (restricted)
  13. Shelly Lundberg & Robert Pollak, 2003. "Efficiency in Marriage," Review of Economics of the Household, Springer, vol. 1(3), pages 153-167, September. [Downloadable!] (restricted)
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  14. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January. [Downloadable!] (restricted)
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