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Collateralized Marriage

Author

Listed:
  • Jeanne Lafortune
  • Corinne Low

Abstract

Marriage rates have become increasingly stratified by homeownership. We investigate this in a household model where investments in public goods reduce future earnings and, thus, divorce risk creates inefficiencies. Access to a joint savings technology, like a house, collateralizes marriage, providing insurance to the lower-earning partner and increasing specialization, public goods, and value from marriage. We use idiosyncratic variation in housing prices to show that homeownership access indeed leads to greater specialization. The model also predicts that policies that erode the marriage contract in other ways will make wealth a more important determinant of marriage, which we confirm empirically.

Suggested Citation

  • Jeanne Lafortune & Corinne Low, 2023. "Collateralized Marriage," American Economic Journal: Applied Economics, American Economic Association, vol. 15(4), pages 252-291, October.
    • Handle: RePEc:aea:aejapp:v:15:y:2023:i:4:p:252-91
    DOI: 10.1257/app.20210614
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    Cited by:

    1. Frederik Almar & Benjamin Friedrich & Ana Reynoso & Bastian Schulz & Rune M. Vejlin, 2025. "Families’ Career Investments and Firms’ Promotion Decisions," NBER Working Papers 33438, National Bureau of Economic Research, Inc.
    2. Bhaskar, V. & Li, Wenchao & Yi, Junjian, 2025. "Strategic parental investments in a competitive marriage market," European Economic Review, Elsevier, vol. 173(C).
    3. Yuting BAI & Jun Hyung KIM & Anqi LI & Shiko MARUYAMA & Zhe YANG, 2025. "A House for My Family: The impacts of down payment rate on marriage and fertility," Discussion papers 25056, Research Institute of Economy, Trade and Industry (RIETI).
    4. Bram De Rock & Tom Potoms & Mariia Kovaleva, 2025. "Housing wealth, marital stability and labor supply: an intertemporal analysis," IFS Working Papers W25/13, Institute for Fiscal Studies.
    5. Goussé, Marion & Leturcq, Marion, 2022. "More or less unmarried. The impact of legal settings of cohabitation on labour market outcomes," European Economic Review, Elsevier, vol. 149(C).
    6. Hall, Jonathan D. & Thiele, Derek, 2025. "A comment on "Examining Inequality in the Time Cost of Waiting"," I4R Discussion Paper Series 243, The Institute for Replication (I4R).
    7. Rafael González-Val & Miriam Marcén, 2024. "Divorce law reforms and house prices in Europe," European Journal of Law and Economics, Springer, vol. 58(3), pages 517-549, December.
    8. Bram De Rock & Mariia Kovaleva & Tom Potoms, 2023. "A spouse and a house are all we need? Housing demand, labor supply and divorce over the lifecycle," IFS Working Papers W23/35, Institute for Fiscal Studies.
    9. Fabio Blasutto & Egor Kozlov, 2020. "(Changing) Marriage and Cohabitation Patterns in the US: do Divorce Laws Matter?," 2020 Papers pbl245, Job Market Papers.
    10. Tom Potoms & Sarah Rosenberg, 2024. "Public insurance and marital outcomes: Evidence from the Affordable Care Act's Medicaid expansions," IFS Working Papers W24/53, Institute for Fiscal Studies.
    11. María Eugenia Echeberría, 2024. "Female selection into employment along the earnings distribution," Documentos de Trabajo (working papers) 24-08, Instituto de Economía - IECON.
    12. La, Jung Joo, 2025. "Effect of house prices on marriage: Evidence from Korea," Journal of Asian Economics, Elsevier, vol. 100(C).
    13. Freer, Mikhail & Surana, Khushboo, 2025. "Marital stability with committed couples: A revealed preference analysis," Games and Economic Behavior, Elsevier, vol. 150(C), pages 131-159.
    14. Patrick Bayer & Kerwin Kofi Charles & Ellora Derenoncourt, 2025. "Racial Inequality in the Labor Market," Working Papers 343, Princeton University, Department of Economics, Center for Economic Policy Studies..
    15. Piano, Clara E., 2025. "Mind the fertility gap: Why people stopped having babies and how economic freedom can help," IEA Discussion Papers 143, Institute of Economic Affairs (IEA).
    16. Christopher Jepsen & Lisa Jepsen, 2025. "U.S. Housing Outcomes by Race, Ethnicity, and Sexual Orientation, 2005–2021," Review of Economics of the Household, Springer, vol. 23(1), pages 245-276, March.
    17. Clara E. Piano & Rachael Behr & Kacey Reeves West, 2024. "The supply and demand of marital contracts: the case of same-sex marriage," Public Choice, Springer, vol. 198(3), pages 237-268, March.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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