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A Spouse and a House are all we need? Housing Demand, Labor Supply and Divorce over the Lifecycle

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  • Bram De Rock
  • Mariia Kovaleva
  • Tom Potoms

Abstract

To analyze the impact of changes in the value of marriage on household decisions, we present a limited commitment framework of household behavior in which decisions are made regarding labor supply, divorce and housing demand over the lifecycle. We identify and estimate our structural model using exogenous variation in female labor supply and divorce rates due to the White v. White case in England. We conclude that limited commitment dampens the added worker effect, while the changes in the value of marriage due to a housing price shock have an asymmetric impact on individual welfare both across gender and marital state. We also show that tightening the credit market in different ways can lead to opposite behavior in terms of household savings and female labor supply.

Suggested Citation

  • Bram De Rock & Mariia Kovaleva & Tom Potoms, 2023. "A Spouse and a House are all we need? Housing Demand, Labor Supply and Divorce over the Lifecycle," Working Papers ECARES 2023-18, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:eca:wpaper:2013/364446
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    2. Gaston P. Fernandez & Mariia Kovaleva, 2024. "Personality Traits, the Marriage Market, and Household Behavior," Working Papers ECARES 2024-21, ULB -- Universite Libre de Bruxelles.
    3. Thomas Demuynck & Tom Potoms & Morgane Rigaux, 2024. "Choice Dominance and Single Crossing Indifference Curves: a Revealed Preference Analysis," Working Papers ECARES 2024-23, ULB -- Universite Libre de Bruxelles.

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    Keywords

    Limited commitment; divorce legislation; value of marriage; housing demand; labor supply; credit market policy.;
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