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Marriage Timing and Forward Contracts in Marriage

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  • Gani Aldashev
  • Zaki Wahhaj

Abstract

We study how contractual incompleteness affects marriage contracts, including premarital investments in human capital, age of marriage, and the timing of payments. We formalise different solutions to the contractual problem and document their use across societies and at different points in history. The most common form of marriage arrangement today is one where human capital investments precede the marriage agreement. However, two other forms of contractual arrangements have also been prevalent in the past: (i) transfer of the bride to the groom's family prior to human capital investments (e.g. pre-pubescent marriages); (ii) a forward contract specifies investments to be made in the bride before her transfer to the groom's family (e.g. cradle betrothal). Each alternative suffers from a form of inefficiency (due, respectively, to search costs, agency problems in childrearing, and underinvestment due to the classical hold-up problem). The model generates predictions regarding the contractual form adopted as a function of the prevailing production technology, population density, and credit constraints. We argue that a theory of marriages that allows contractual form to be endogenous provide insights about the impact of development policies that are missed when the contractual form is taken as given.

Suggested Citation

  • Gani Aldashev & Zaki Wahhaj, 2019. "Marriage Timing and Forward Contracts in Marriage," Working Papers ECARES 2019-20, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:eca:wpaper:2013/293782
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    References listed on IDEAS

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    1. Robert Shimer & Lones Smith, 2000. "Assortative Matching and Search," Econometrica, Econometric Society, vol. 68(2), pages 343-370, March.
    2. Leeson, Peter T. & Suarez, Paola A., 2017. "Child brides," Journal of Economic Behavior & Organization, Elsevier, vol. 144(C), pages 40-61.
    3. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    4. Chari, A.V. & Heath, Rachel & Maertens, Annemie & Fatima, Freeha, 2017. "The causal effect of maternal age at marriage on child wellbeing: Evidence from India," Journal of Development Economics, Elsevier, vol. 127(C), pages 42-55.
    5. Quy-Toan Do & Sriya Iyer & Shareen Joshi, 2013. "The Economics of Consanguineous Marriages," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 904-918, July.
    6. Siwan Anderson & Chris Bidner, 2015. "Property Rights over Marital Transfers," The Quarterly Journal of Economics, Oxford University Press, vol. 130(3), pages 1421-1484.
    7. Siwan Anderson, 2007. "The Economics of Dowry and Brideprice," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 151-174, Fall.
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    More about this item

    Keywords

    Marriage Markets; Child Marriage; Dowry; Human Capital Investments; Brideprice; Forward Contracts; Incomplete Contracts; Hold-up Problem;

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