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Happily ever after? Intrahousehold bargaining and the distribution of utility within marriage

Listed author(s):
  • Dirk Bethmann

    (Department of Economics, Korea University, Seoul, Republic of Korea)

  • Robert Rudolf

    ()

    (Division of International Studies, Korea University, Seoul, Republic of Korea)

Using a rich longitudinal data set of married couples from the Korean Labor and Income Panel Study (KLIPS), this article seeks to uncover the relationship between intrahousehold bargaining and the distribution of experienced utility within marriage. Providing an empirical test of the cooperative bargaining model, we confirm both substantial gains from marriage and the importance of the exogenous threat point in the distribution of happiness within the household. In particular, we find that the higher a partner¡¯s relative predicted earnings outside of marriage, the higher her/ his relative gains from marriage. In addition, this study reveals an asymmetry between women and men in older couples: men on average are endowed with a lower threat point utility, yet secure higher returns from marriage. This is likely to be due to social norms and prescribed gender roles which are more prevalent within the older generation.

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File URL: http://econ.korea.ac.kr/~ri/WorkingPapers/w1503.pdf
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Paper provided by Institute of Economic Research, Korea University in its series Discussion Paper Series with number 1503.

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Date of creation: 2015
Handle: RePEc:iek:wpaper:1503
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