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Cohabitation, Child Development, and College Costs

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Listed:
  • Efi Adamopoulou
  • Anne Hannusch
  • Karen Kopecky
  • Tim Obermeier

Abstract

Why do U.S. college-educated couples with children marry at higher rates than those without a college degree? We argue that investing in children is more valuable for college-educated couples, who are more likely to send their children to college. Marriage, which entails lower separation risk and more equal asset division if separation does occur, provides insurance to the lower-earning spouse, which facilitates child investment. Using an OLG model of marriage, cohabitation, wealth accumulation, and educational investments where college completion is risky, we find that insurance through marriage is particularly important when investing in children is costly and college costs are high.

Suggested Citation

  • Efi Adamopoulou & Anne Hannusch & Karen Kopecky & Tim Obermeier, 2025. "Cohabitation, Child Development, and College Costs," CRC TR 224 Discussion Paper Series crctr224_2025_628, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2025_628
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp628
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    References listed on IDEAS

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    4. John A. Maluccio & John Hoddinott & Jere R. Behrman & Reynaldo Martorell & Agnes R. Quisumbing & Aryeh D. Stein, 2009. "The Impact of Improving Nutrition During Early Childhood on Education among Guatemalan Adults," Economic Journal, Royal Economic Society, vol. 119(537), pages 734-763, April.
    5. Sabino Kornrich & Frank Furstenberg, 2013. "Investing in Children: Changes in Parental Spending on Children, 1972–2007," Demography, Springer;Population Association of America (PAA), vol. 50(1), pages 1-23, February.
    6. Marcos A. Rangel, 2006. "Alimony Rights and Intrahousehold Allocation of Resources: Evidence from Brazil," Economic Journal, Royal Economic Society, vol. 116(513), pages 627-658, July.
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    More about this item

    Keywords

    cohabitation; marriage; child development; time and money investments; human capital accumulation; college costs;
    All these keywords.

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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