Divorce and the Option Value of Marital Search
AbstractThis works tests whether or not the introduction of divorce law changes the timing of marital search. Common sense suggests that rational agents should adjust to the divorce risk by increasing the average length of search spell, whereas the option value theory stresses the role played by irreversible investments: in this case, the new exit option available to married partners should result in shorter search spells. Using a dynamic model of marital search, a new dataset of retrospective individual Italian data, and two robust statistical specifications based upon the Before-After estimator, we find strong evidence that the legal innovation actually lowered the age at marriage, thereby worsening the level of marital matching, and possibly reinforcing self-fulfilling prophecies of divorce.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2038.
Date of creation: 22 Feb 2007
Date of revision:
Marital Search; Divorce; Marriage;
Other versions of this item:
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-10 (All new papers)
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.:
- Weiss, Y., 1993.
"The Formation and Dissolution of Families: Why Marry? Who Maries Whom? and what Happens Upon Divorce?,"
15-93, Tel Aviv.
- Weiss, Yoram, 1993. "The formation and dissolution of families: Why marry? Who marries whom? And what happens upon divorce," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 3, pages 81-123 Elsevier.
- Yoram Weiss & Robert J. Willis, .
"Match Quality, New Information and Marital Dissolution,"
University of Chicago - Population Research Center
95-13, Chicago - Population Research Center.
- Weiss, Yoram & Willis, Robert J, 1997. "Match Quality, New Information, and Marital Dissolution," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages S293-329, January.
- Weiss, Y. & Willis, R.J., 1995. "Match Quality, New Information and Marital Dissolution," Papers 33-95, Tel Aviv - the Sackler Institute of Economic Studies.
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