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Divorce Property Division and the Decision to Marry or Cohabit

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  • Fisher, H.

Abstract

This paper presents a model of the choice between marriage and cohabitation for a couple who have decided to form a relationship. The model is used to analyse the implications of changing from a title based division of property on divorce to an equal sharing regime. There are two opposing effects. In line with popular expectations, the change to an equal sharing regime prevents some wealthy individuals from marrying since they risk losing half of their assets in the event of divorce. Offsetting this, the equal sharing property division regime enables cooperative investments to be made in marriage, and so increases the value of marriage relative to cohabitation for some couples. Overall the impact on the marriage rate is ambiguous, although the rate is most likely to increase where it is more difficult to make cooperative investments due to unilateral divorce laws, and where couples are more similar to each other, reducing their cost of divorce.

Suggested Citation

  • Fisher, H., 2011. "Divorce Property Division and the Decision to Marry or Cohabit," Cambridge Working Papers in Economics 1101, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1101
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    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1101.pdf
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    References listed on IDEAS

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    1. Smith, Ian, 1997. "Explaining the Growth of Divorce in Great Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(5), pages 519-544, November.
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    3. Leora Friedberg, 1998. "Did Unilateral Divorce Raise Divorce Rates? Evidence from Panel Data," NBER Working Papers 6398, National Bureau of Economic Research, Inc.
    4. Alberto Alesina & Paola Giuliano, 2006. "Divorce, Fertility and the Shot Gun Marriage," NBER Working Papers 12375, National Bureau of Economic Research, Inc.
    5. Rainer, Helmut, 2007. "Should we write prenuptial contracts?," European Economic Review, Elsevier, vol. 51(2), pages 337-363, February.
    6. Niko Matouschek & Imran Rasul, 2008. "The Economics of the Marriage Contract: Theories and Evidence," Journal of Law and Economics, University of Chicago Press, vol. 51(1), pages 59-110, February.
    7. Giulio Fella & Paola Manzini & Marco Mariotti, 2004. "Does Divorce Law Matter?," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 607-633, June.
    8. Éric Langlais, 2010. "On unilateral divorce and the “selection of marriages” hypothesis," Recherches économiques de Louvain, De Boeck Université, vol. 76(3), pages 229-256.
    9. González, Libertad & Viitanen, Tarja K., 2009. "The effect of divorce laws on divorce rates in Europe," European Economic Review, Elsevier, vol. 53(2), pages 127-138, February.
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    13. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February.
    14. Martin Halla, 2009. "The Effect of Joint Custody on Marriage and Divorce," Economics working papers 2009-09, Department of Economics, Johannes Kepler University Linz, Austria.
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    17. Stéphane Mechoulan, 2006. "Divorce Laws and the Structure of the American Family," The Journal of Legal Studies, University of Chicago Press, vol. 35(1), pages 143-174, January.
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    Cited by:

    1. Nicolas Frémeaux & Marion Leturcq, 2013. "Plus ou moins mariés : l'évolution du mariage et des régimes matrimoniaux en France," Économie et Statistique, Programme National Persée, vol. 462(1), pages 125-151.

    More about this item

    Keywords

    Multisectors; Technology shocks; Business cycles; Long-run restrictions; Cross Sectional Dependence;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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