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Social insurance and the marriage market

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  • Persson, Petra

    (Stanford University, Department of Economics)

Abstract

Social insurance is often linked to marriage. I model how such linkage affects the marriage market, and exploit Sweden’s elimination of survivors insurance to demonstrate economically important responses along several behavioral margins in this market. Entry into marriage reflects a demand for survivors insurance up to 50 years before expected payout, especially among couples with high husband mortality risks. Further, elimination of survivors insurance induces divorces and intra-household redistribution towards wives in pre-existing marriages. Because survivors insurance subsidizes couples with highly unequal earnings (capacities), its elimination also raises the long-run assortativeness of matching. These findings demonstrate that when social insurance is linked to marriage, marital behavior is an integral component of couples’ strategies to plan for financial security in old age. The magnitude of these marriage market responses influences the optimality of linking social insurance to marriage.

Suggested Citation

  • Persson, Petra, 2015. "Social insurance and the marriage market," Working Paper Series 2015:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2015_006
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    3. Chen, Shuai & van Ours, Jan C., 2020. "Symbolism matters: The effect of same-sex marriage legalization on partnership stability," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 44-58.
    4. Thomas S. Dee & Will Dobbie & Brian A. Jacob & Jonah Rockoff, 2019. "The Causes and Consequences of Test Score Manipulation: Evidence from the New York Regents Examinations," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 382-423, July.
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    6. Wolfgang Frimmel & Martin Halla & Rudolf Winter-Ebmer, 2014. "Can Pro-Marriage Policies Work? An Analysis of Marginal Marriages," Demography, Springer;Population Association of America (PAA), vol. 51(4), pages 1357-1379, August.
    7. Hamish Low & Costas Meghir & Luigi Pistaferri & Alessandra Voena, 2018. "Marriage, Labor Supply and the Dynamics of the Social Safety Net," Cowles Foundation Discussion Papers 2121, Cowles Foundation for Research in Economics, Yale University.
    8. David Autor & Andreas Kostøl & Magne Mogstad & Bradley Setzler, 2019. "Disability Benefits, Consumption Insurance, and Household Labor Supply," American Economic Review, American Economic Association, vol. 109(7), pages 2613-2654, July.
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    More about this item

    Keywords

    Marriage; Social insurance; Cohabitation; Matching; Long-term financial planning;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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