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A Human Capital-Based Theory of Post Marital Residence Rules

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Author Info
Matthew J. Baker () (United States Naval Academy)
Joyce P. Jacobsen () (Economics Department, Wesleyan University)

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Abstract

In pre-modern societies the residence of a newly-wedded couple is often decided by custom. We formulate a theory of optimal post-marital residence rules based on contracting problems created by the nature of pre-marriage human capital investments. We argue that a fixed post-marital residence rule may mitigate a hold-up problem by specifying marriage terms and limiting possibilities for renegotiation; the trade-off is that the rule may prohibit beneficial renegotiation of post-marital location. A point of interest of our approach is that the magnitude and direction of transfers accompanying marriage are endogenous. We apply our theoretical results to understanding cross-cultural post-marital residence patters. We find some predictive ability in variables related to outside options, control over the environment, and potential degree of social control.

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Publisher Info
Paper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number 2005-006.

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Length: 54 pages
Date of creation: Sep 2005
Date of revision:
Publication status: published in Journal of Law, Economics, and Organization, April 2007, 23 (1): 208-241
Handle: RePEc:wes:weswpa:2005-006

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Related research
Keywords: Marriage; Bargaining; Hold-up Problem; Dowry; Bride-Price;

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Find related papers by JEL classification:
J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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References listed on IDEAS
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.:
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  19. Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1994. "Renegotiation Design with Unverifiable Information," Econometrica, Econometric Society, vol. 62(2), pages 257-82, March. [Downloadable!] (restricted)
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  27. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-50, October. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Matthew J. Baker, 2004. "Human Capital and Hold-ups in Indigenous Society: The Role of Customs and the Market," Departmental Working Papers 7, United States Naval Academy Department of Economics. [Downloadable!]
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