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Investment in Schooling and the Marriage Market

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  • Pierre-Andre Chiappori
  • Yoram Weiss

    ()
    (Economics University of Colorado)

  • Murat Iyigun
  • Yoram Weiss

Abstract

We produce a model with pre-marital schooling investment, endogenuos marital matching and spousal specialization in homework and market production. Schooling investments generate two kinds of returns in our framework: a labor-market return due to the education premium and a marriage-market return because education can improve the intra-marital share of the surplus one can extract from marriage. When the returns to education are gender neutral, men and women educate in equal proportions and there is pure positive assortative matching in the marriage markets. But if the returns are not gender neutral, then there is mixing in equilibrium where some educated individuals marry uneducated spouses and those who educate less because their labormarket return is lower extract a relatively larger share of the marital surplus. Conditional on the choice of schooling, couples’ career decisions affect the size of their marital surplus, but the existence of large and frictionless marriage markets can still produce efficient household specialization where the higher-wage spouse specializes in market production and the lower-wage spouse engages in homework. Even when cultural and social norms or the time requirements of homework dictate that wives devote relatively more time to homework, women can acquire more schooling than men if a gender wage gap exists but narrows with the level of education

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 43.

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Date of creation: 03 Dec 2006
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Handle: RePEc:red:sed006:43

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Keywords: Pre-Marital Investments; Intra-Household Allocations; Assortative Matching.;

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