Advanced Search
MyIDEAS: Login to save this paper or follow this series

Love and taxes - and matching institutions

Contents:

Author Info

  • Konrad, Kai A.
  • Lommerud, Kjell Erik

Abstract

We study a setting with search frictions in the marriage market and with incomplete contracting inside the family. Everyone prefers a partner that has high income and is a perfect emotional match, but compromises must often be struck. A high income earner may abstain from marrying a low-income earner even though they would be a perfect match emotionally, because the highincome earner may dislike the implicit income redistribution implied by the marriage. Redistributive income taxation may ease this problem. Income matching institutions that secure that people largely from the same income groups meet each other can substitute for redistribution, so that optimal redistribution is reduced. We also introduce a divorce option. Redistributive taxation is shown both to further and stabilize marriage. -- Wenn Menschen mit unterschiedlichem Einkommen heiraten, führt dies zu einer Umverteilung innerhalb der Ehe von der wirtschaftlich stärkeren zur wirtschaftlich schwächeren Person. Zwei Personen, die zufällig aufeinander treffen und aufgrund ähnlicher Interessen und Neigungen gut zueinander passen, werden auch die finanziellen Folgen einer Heirat berücksichtigen. Falls die Person mit hohem Einkommen diese Umverteilung als zu stark empfindet, kommt die Ehe nicht zustande. Die Rente, die z.B. dadurch entsteht, dass das Paar ähnliche Interessen hat oder gemeinsamen Hobbys nachgehen kann, geht in diesem Fall verloren. Progressive Besteuerung führt zu einer Angleichung der Einkommensverteilung und verringert daher die Wahrscheinlichkeit, dass Ehen aufgrund hoher Einkommensunterschiede nicht zustande kommen. Aus wohlfahrtstheoretischer Sicht ist dies ein positiver Aspekt umverteilender Besteuerung, der bisher in der Literatur nicht berücksichtigt wurde. Die optimale Höhe der Besteuerung hängt von den Matching-Institutionen ab, d.h. davon wer wen auf dem Heiratsmarkt trifft. Treffen vorwiegend Personen mit unterschiedlichem Einkommen und ähnlichen Interessen aufeinander, ist der positive Effekt der Besteuerung besonders wirksam. In diesem Fall ist der optimale Steuersatz umso höher, je ähnlicher die Interessen der potentiellen Partner ist. Umgekehrt kann progressive Besteuerung in einer Gesellschaft, in der vorwiegend Personen mit ohnehin ähnlichem Einkommen aufeinandertreffen, kaum etwas bewirken. Daher fällt in diesem Fall der optimale Steuersatz umso geringer aus, je ähnlicher die Einkommen der potentiellen Paare auf dem Heiratsmarkt sind.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://econstor.eu/bitstream/10419/51089/1/56339398X.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2008-04.

as in new window
Length:
Date of creation: 2008
Date of revision:
Handle: RePEc:zbw:wzbmpg:spii200804

Contact details of provider:
Postal: Reichpietschufer 50, 10785 Berlin
Phone: +49 (0)30 25491-402
Fax: +49 (0)30 25491-400
Email:
Web page: http://www.wzb.eu/
More information through EDIRC

Related research

Keywords: Marriage; optimal taxation; emotional rents; love; incomplete contracts; assortative mating; divorce;

Other versions of this item:

Find related papers by JEL classification:

References

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.:
as in new window
  1. Konrad, Kai A & Lommerud, Kjell Erik, 1996. "The Bargaining Family Revisited," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1312, C.E.P.R. Discussion Papers.
  2. Apps, P.F. & Rees, R., 1998. "On the Taxation of Trade Within and Between Households," Papers, Australian National University - Department of Economics 337, Australian National University - Department of Economics.
  3. Hochman, Harold M & Rodgers, James D, 1974. "Redistribution and the Pareto Criterion," American Economic Review, American Economic Association, American Economic Association, vol. 64(4), pages 752-57, September.
  4. Pauly, Mark V., 1973. "Income redistribution as a local public good," Journal of Public Economics, Elsevier, Elsevier, vol. 2(1), pages 35-58, February.
  5. Raquel Ferndez & Nezih Guner & John Knowles, 2001. "Love and Money: A Theoretical and Empirical Analysis of Household Sorting and Inequality," Penn CARESS Working Papers, Penn Economics Department d3d043317c8e26c4039c21aa0, Penn Economics Department.
  6. Dan Anderberg & Alessandro Balestrino, 2011. "Public Spending and Taxation with Non-cooperative Families," CESifo Economic Studies, CESifo, CESifo, vol. 57(2), pages 259-282, June.
  7. Anderberg, Dan, 2002. "An Equilibrium Analysis of Marriage, Divorce and Risk-Sharing," Royal Economic Society Annual Conference 2002, Royal Economic Society 6, Royal Economic Society.
  8. Boulier, Bryan L & Rosenzweig, Mark R, 1984. "Schooling, Search, and Spouse Selection: Testing Economic Theories of Marriage and Household Behavior," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 92(4), pages 712-32, August.
  9. Shelly Lundberg & Robert Pollak, 2003. "Efficiency in Marriage," Review of Economics of the Household, Springer, Springer, vol. 1(3), pages 153-167, September.
  10. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 38(114), pages 175-208, April.
  11. Daniel R. Feenberg & Harvey S. Rosen, 1994. "Recent Developments in the Marriage Tax," NBER Working Papers 4705, National Bureau of Economic Research, Inc.
  12. Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 97(4), pages 581-601, December.
  13. John Ermisch & Marco Francesconi & Thomas Siedler, 2006. "Intergenerational Mobility and Marital Sorting," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 116(513), pages 659-679, 07.
  14. Patricia F. Apps & Ray Rees, 1999. "Individual versus Joint Taxation in Models with Household Production," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(2), pages 393-403, April.
  15. Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 616, University of Warwick, Department of Economics.
  16. Giacomo Corneo, 2000. "The Efficient Side of Progressive Income Taxation," CESifo Working Paper Series 364, CESifo Group Munich.
  17. Schroyen, Fred, 2003. "Redistributive taxation and the household: the case of individual filings," Journal of Public Economics, Elsevier, Elsevier, vol. 87(11), pages 2527-2547, October.
  18. Burdett, Kenneth & Coles, Melvyn G, 1999. "Long-Term Partnership Formation: Marriage and Employment," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 109(456), pages F307-34, June.
  19. Dan Anderberg, 2004. "Getting Hitched: The Equilibrium Marriage Market Behaviour of a British Cohort," Royal Holloway, University of London: Discussion Papers in Economics, Department of Economics, Royal Holloway University of London 04/12, Department of Economics, Royal Holloway University of London, revised Jul 2004.
  20. Pierre-Andre Chiappori & Yoram Weiss, 2006. "Divorce, Remarriage, and Welfare: A General Equilibrium Approach," Journal of the European Economic Association, MIT Press, MIT Press, vol. 4(2-3), pages 415-426, 04-05.
  21. Konrad, Kai A & Künemund, Harald & Lommerud, Kjell Erik & Robledo, Julio R, 1999. "Geography of the Family," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2312, C.E.P.R. Discussion Papers.
  22. Imran Rasul, 2006. "Marriage Markets and Divorce Laws," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 22(1), pages 30-69, April.
  23. Pahl, Jan, 1995. "His money, her money: Recent research on financial organisation in marriage," Journal of Economic Psychology, Elsevier, Elsevier, vol. 16(3), pages 361-376, September.
  24. David Lam, 1988. "Marriage Markets and Assortative Mating with Household Public Goods: Theoretical Results and Empirical Implications," Journal of Human Resources, University of Wisconsin Press, vol. 23(4), pages 462-487.
  25. Michael J. Brien & Lee A. Lillard & Steven Stern, 2006. "Cohabitation, Marriage, And Divorce In A Model Of Match Quality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(2), pages 451-494, 05.
  26. Iulie Aslaksen & Tom Wennemo & Rolf Aaberge, 2000. ""Birds of a Feather Flock Together" The Impact of Choice of Spouse on Family Labor Income Inequality," Discussion Papers, Research Department of Statistics Norway 276, Research Department of Statistics Norway.
  27. Lena Edlund, 1999. "Son Preference, Sex Rations, and Marriage Patterns," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(6), pages 1275-1304, December.
  28. Lena Edlund, 2006. "Marriage: Past, Present, Future?," CESifo Economic Studies, CESifo, CESifo, vol. 52(4), pages 621-639, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Balestrino, Alessandro & Ciardi, Cinzia & Mammini, Claudio, 2013. "On the causes and consequences of divorce," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 45(C), pages 1-9.
  2. Konrad, Kai A., 2013. "Affection, speed dating and heart breaking," Discussion Papers, Research Unit: Economics of Change SP II 2013-309, Social Science Research Center Berlin (WZB).
  3. Aloys Prinz, 2010. "Labor markets and mating markets: Using taxes to reduce the male–female pay gap," Journal of Bioeconomics, Springer, Springer, vol. 12(1), pages 43-53, April.
  4. Dan Anderberg & Yu Zhu, 2010. "The Effect of Education on Marital Status and Partner Characteristics: Evidence from the UK," CESifo Working Paper Series 3104, CESifo Group Munich.
  5. Dan Anderberg & Yu Zhu, 2014. "What a difference a term makes: the effect of educational attainment on marital outcomes in the UK," Journal of Population Economics, Springer, Springer, vol. 27(2), pages 387-419, April.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:zbw:wzbmpg:spii200804. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.