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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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    2. Wojciech Kopczuk & David Munroe, 2015. "Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 214-257, May.
    3. Noemi Peter & Petter Lundborg & Dinand Webbink, 2015. "The Effect of Sibling's Gender on Earnings, Education and Family Formation," Tinbergen Institute Discussion Papers 15-073/V, Tinbergen Institute.
    4. 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.
    5. 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.
    6. Chiappori, Pierre-André & Salanié, Bernard, 2021. "Mating Markets," CEPR Discussion Papers 16041, C.E.P.R. Discussion Papers.
      • Pierre-André Chiappori & Bernard Salanié, 2021. "Mating Markets," Working Papers 2021-016, Human Capital and Economic Opportunity Working Group.
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    13. Josefine Koebe & Jan Marcus, 2020. "The Impact of the Length of Schooling on the Timing of Family Formation," Discussion Papers of DIW Berlin 1896, DIW Berlin, German Institute for Economic Research.
    14. Maya Rossin-Slater, 2017. "Signing Up New Fathers: Do Paternity Establishment Initiatives Increase Marriage, Parental Investment, and Child Well-Being?," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 93-130, April.
    15. Charlotte H. Feldhoff, 2021. "The Child Penalty: Implications of Parenthood on Labour Market Outcomes for Men and Women in Germany," SOEPpapers on Multidisciplinary Panel Data Research 1120, DIW Berlin, The German Socio-Economic Panel (SOEP).
    16. Fan, Elliott & Lien, Hsienming & Ma, Ching-to Albert, 2019. "Uterus at a price: Disability insurance and hysterectomy," Journal of Health Economics, Elsevier, vol. 66(C), pages 1-17.
    17. Michael Levere, "undated". "The Labor Market Consequences of Receiving Disability Benefits During Childhood," Mathematica Policy Research Reports 4a4b6e2d970c4e669ba5f4126, Mathematica Policy Research.
    18. Rebecca Diamond & Petra Persson, 2016. "The Long-term Consequences of Teacher Discretion in Grading of High-stakes Tests," NBER Working Papers 22207, National Bureau of Economic Research, Inc.
    19. Lichtman-Sadot Shirlee, 2014. "The Value of Postponing Pregnancy: California’s Paid Family Leave and the Timing of Pregnancies," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(4), pages 1-33, October.

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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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