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Do bankers prefer married couples?

  • Marion Leturcq

    ()

    (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

Are married couples more credit constrained than unmarried households? If the cost of separation increases the risk of default, banks might be willing to lend to stable couples. In presence of incomplete information, marriage could be used as a signal of the quality of the match. This paper investigates the link between marriage and credit constraints. I use matching methods to evaluate the impact of marriage on credit constraints. I find that married couples are more likely to be approved for their loan, but they bear higher costs of credit. The differences between married and unmarried couples can be attributed to selection in the marriage rather than to discrimination against unmarried couples.

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Paper provided by HAL in its series Working Papers with number halshs-00655584.

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Date of creation: Apr 2011
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Handle: RePEc:hal:wpaper:halshs-00655584
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00655584/en/
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  1. Duca, John V. & Rosenthal, Stuart S., 1994. "Borrowing constraints and access to owner-occupied housing," Regional Science and Urban Economics, Elsevier, vol. 24(3), pages 301-322, June.
  2. Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 19 Jan 2015.
  3. Patrick Kline, 2011. "Oaxaca-Blinder as a Reweighting Estimator," American Economic Review, American Economic Association, vol. 101(3), pages 532-37, May.
  4. Jaffee, Dwight M & Russell, Thomas, 1984. "Imperfect Information, Uncertainty, and Credit Rationing: A Reply," The Quarterly Journal of Economics, MIT Press, vol. 99(4), pages 869-72, November.
  5. Steven Stern & Michael J. Brien & Lee A. Lillard, 1999. "Cohabitation, Marriage, and Divorce in a Model of Match Quality," Virginia Economics Online Papers 322, University of Virginia, Department of Economics.
  6. Midori Wakabayashi & Charles Yuji Horioka, 2005. "Borrowing Constraints and Consumption Behavior in Japan," ISER Discussion Paper 0640, Institute of Social and Economic Research, Osaka University.
  7. Stevenson, Betsey & Wolfers, Justin, 2007. "Marriage and Divorce: Changes and their Driving Forces," CEPR Discussion Papers 6144, C.E.P.R. Discussion Papers.
  8. Ke Chen Chen & Mali Chivakul, 2008. "What Drives Household Borrowing and Credit Constraints? Evidence From Bosnia and Herzegovina," IMF Working Papers 08/202, International Monetary Fund.
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