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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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    Cited by:

    1. Gordon, Roger H. & Kopczuk, Wojciech, 2014. "The choice of the personal income tax base," Journal of Public Economics, Elsevier, vol. 118(C), pages 97-110.
    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. Blau, David M. & Goodstein, Ryan, 2016. "Commitment in the Household: Evidence from the Effect of Inheritances on the Labor Supply of Older Married Couples," IZA Discussion Papers 10059, Institute for the Study of Labor (IZA).
    4. 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.
    5. Thomas S. Dee & Will Dobbie & Brian A. Jacob & Jonah Rockoff, 2016. "The Causes and Consequences of Test Score Manipulation: Evidence from the New York Regents Examinations," NBER Working Papers 22165, National Bureau of Economic Research, Inc.
    6. David Autor & Andreas Ravndal Kostøl & Magne Mogstad & Bradley Setzler, 2017. "Disability benefits, consumption insurance, and household labor supply," Working Paper 2017/16, Norges Bank.
    7. 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.
    8. Michael Levere, "undated". "The Labor Market Consequences of Receiving Disability Benefits During Childhood," Mathematica Policy Research Reports 4a4b6e2d970c4e669ba5f4126, Mathematica Policy Research.
    9. Elliott Fan & Hsienming Lien & Ching-to Albert Ma, 2017. "Uterus at a Price: Disability Insurance and Hysterectomy," Boston University - Department of Economics - Working Papers Series WP2018-001, Boston University - Department of Economics.
    10. 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.
    11. 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.

    More about this item

    Keywords

    Marriage; Social insurance; Cohabitation; Matching; Long-term financial planning;

    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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