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The Effect of Divorce Costs on Marriage Formation and Dissolution

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  • Spiros Bougheas
  • Yannis Georgellis

Abstract

Exploiting the theoretical parallels between the matching of workers to jobs in the labour market and the matching of individuals in the marriage market, we use a search theoretic model of marriage formation and dissolution to examine the effect of divorce costs on both decisions. By introducing learning at both stages of the marital decision process, we show that divorce costs not only affect the probability of divorce but also the probability of marriage. Interestingly, to what extent divorce costs affect the marital status distribution depends on the information regarding the quality of the potential marriage that individuals receive while encountering marital offers.
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Suggested Citation

  • Spiros Bougheas & Yannis Georgellis, "undated". "The Effect of Divorce Costs on Marriage Formation and Dissolution," Economics and Finance Discussion Papers 97-05, Economics and Finance Section, School of Social Sciences, Brunel University.
  • Handle: RePEc:bru:bruedp:97-05
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    Cited by:

    1. Ismail Saglam, 2013. "Divorce Costs and Marital Dissolution in a One-to-One Matching Framework With Nontransferable Utilities," Games, MDPI, Open Access Journal, vol. 4(1), pages 1-19, March.
    2. Jonathan Gruber, 2000. "Is Making Divorce Easier Bad for Children? The Long Run Implications of Unilateral Divorce," NBER Working Papers 7968, National Bureau of Economic Research, Inc.
    3. PARISI, Lavinia, 2012. "The Determinants of First and Second Marital Dissolution. Evidence from Britain," CELPE Discussion Papers 121, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
    4. Mumcu, Ayse & Saglam, Ismail, 2006. "Marriage and Divorce in a Model of Matching," MPRA Paper 1907, University Library of Munich, Germany.
    5. Jessamyn Schaller, 2013. "For richer, if not for poorer? Marriage and divorce over the business cycle," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1007-1033, July.
    6. Audrey Light & Yoshiaki Omori, 2009. "Economic Incentives and Family Formation," Working Papers 09-08, Ohio State University, Department of Economics.
    7. Jonathan Gruber, 2004. "Is Making Divorce Easier Bad for Children? The Long-Run Implications of Unilateral Divorce," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 799-834, October.
    8. Ayse Mumcu & Ismail Saglam, 2008. "Marriage Formation/Dissolution and Marital Distribution in a Two-Period Economic Model of Matching with Cooperative Bargaining," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 11(4), pages 1-3.
    9. Zvika Neeman & Andrew F. Newman & Claudia Olivetti, 2008. "Are Career Women Good for Marriage?," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-167, Boston University - Department of Economics.
    10. Audrey Light & Yoshiaki Omori, 2012. "Can Long-Term Cohabiting and Marital Unions be Incentivized?," Working Papers 12-01, Ohio State University, Department of Economics.
    11. Jeffrey Dew & Joseph Price, 2011. "Beyond Employment and Income: The Association Between Young Adults’ Finances and Marital Timing," Journal of Family and Economic Issues, Springer, vol. 32(3), pages 424-436, September.

    More about this item

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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