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An Assignment Model with Divorce and Remarriage

Author

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  • Pierre-André Chiappori

    (Columbia University)

  • Murat Iyigun

    (University of Colorado)

  • Yoram Weiss

    (Tel-Aviv University)

Abstract

We develop a two-sided matching model with positive sorting, divorce and remarriage. Match quality for each couple is revealed ex post and those with poor draws divorce. Competition determines lifetime expected utilities but per-period utilities depend on the laws that govern the distribution of assets upon divorce. We discuss separately cases in which remarriage is or is not feasible and cases in which commitments are or are not made. In all cases, lifetime utilities are exactly pinned down by equilibrium (stability) requirements. Moreover, ex-post Nash bargaining and ex-ante commitment yield the same non-contingent intertemporal allocations. We then analyze the impact of changes in the property division upon divorce, considering for instance a reform that favors women. The short-term impact of the reform on the allocations of already married wives is positive. However, its long-term impact on yet unmarried women is not because such a reform generates lower utility for women within marriage which exactly offsets their higher prospective divorce settlement. When remarriage is possible, more complex effects could occur: the reform typically alters divorce probabilities and it may affect the total surplus generated by marriage, thus either increasing both spouses’ welfare or decreasing both.

Suggested Citation

  • Pierre-André Chiappori & Murat Iyigun & Yoram Weiss, 2008. "An Assignment Model with Divorce and Remarriage," Working Papers 2009-002, Becker Friedman Institute for Research In Economics.
  • Handle: RePEc:bfi:wpaper:2009-002
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    References listed on IDEAS

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    1. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09j00420pk7 is not listed on IDEAS
    2. Hiller, Victor & Recoules, Magali, 2013. "Changes in divorce patterns: Culture and the law," International Review of Law and Economics, Elsevier, vol. 34(C), pages 77-87.
    3. Nicholas Jacquemet & Jean-Marc Robin, 2011. "Marriage with Labor Supply," 2011 Meeting Papers 446, Society for Economic Dynamics.
    4. Marion Goussé & Nicolas Jacquemet & Jean-Marc Robin, 2016. "Marriage, Labor Supply, and Home Production," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01261040, HAL.
    5. Marion Goussé & Nicolas Jacquemet & Jean-Marc Robin, 2016. "Marriage, Labor Supply, and Home Production," Working Papers halshs-01261040, HAL.
    6. Marion Goussé & Nicolas Jacquemet & Jean-Marc Robin, 2016. "Marriage, Labor Supply, and Home Production: A Longitudinal Microeconomic Analysis of Marriage, Intra-Household Bargaining and Time Use Using the BHPS, 1991-2008," Cahiers de recherche 1601, CIRPEE.
    7. repec:wly:econjl:v:127:y:2017:i:604:p:1874-1905 is not listed on IDEAS
    8. Hans Bloemen & Elena Stancanelli, 2015. "Toyboys or supergirls? An analysis of partners’ employment outcomes when she outearns him," Review of Economics of the Household, Springer, vol. 13(3), pages 501-530, September.
    9. Alessandra Voena, 2011. "Yours, Mine and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?," Discussion Papers 10-022, Stanford Institute for Economic Policy Research.
    10. Nicolas Jacquemet & Jean-Marc Robin, 2011. "Marriage with Labor Supply," Working Papers hal-01073728, HAL.
    11. Pierre‐Andre Chiappori & Murat Iyigun & Jeanne Lafortune & Yoram Weiss, 2017. "Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly Formed Partnerships," Economic Journal, Royal Economic Society, vol. 127(604), pages 1874-1905, September.

    More about this item

    Keywords

    matching; intra-household allocations; Becker-Coase theorem;

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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