IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp3892.html
   My bibliography  Save this paper

An Assignment Model with Divorce and Remarriage

Author

Listed:
  • Chiappori, Pierre-André

    (Columbia University)

  • Iyigun, Murat

    (University of Colorado, Boulder)

  • Weiss, Yoram

    (Tel Aviv University)

Abstract

We develop a two-sided matching model with positive sorting, divorce and remarriage. Match quality for each couple is revealed ex post and those with poor draws divorce. Competition determines lifetime expected utilities but per-period utilities depend on the laws that govern the distribution of assets upon divorce. We discuss separately cases in which remarriage is or is not feasible and cases in which commitments are or are not made. In all cases, lifetime utilities are exactly pinned down by equilibrium (stability) requirements. Moreover, ex-post Nash bargaining and ex-ante commitment yield the same non-contingent intertemporal allocations. We then analyze the impact of changes in the property division upon divorce, considering for instance a reform that favors women. The short-term impact of the reform on the allocations of already married wives is positive. However, its long-term impact on yet unmarried women is not because such a reform generates lower utility for women within marriage which exactly offsets their higher prospective divorce settlement. When remarriage is possible, more complex effects could occur: the reform typically alters divorce probabilities and it may affect the total surplus generated by marriage, thus either increasing both spouses' welfare or decreasing both.

Suggested Citation

  • Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2008. "An Assignment Model with Divorce and Remarriage," IZA Discussion Papers 3892, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp3892
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp3892.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 2002. "Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(1), pages 209-244.
    2. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    3. Rainer, Helmut, 2007. "Should we write prenuptial contracts?," European Economic Review, Elsevier, vol. 51(2), pages 337-363, February.
    4. Peters, H Elizabeth, 1986. "Marriage and Divorce: Informational Constraints and Private Contracting," American Economic Review, American Economic Association, vol. 76(3), pages 437-454, June.
    5. Patrick Legros & Andrew F. Newman, 2007. "Beauty Is a Beast, Frog Is a Prince: Assortative Matching with Nontransferabilities," Econometrica, Econometric Society, vol. 75(4), pages 1073-1102, July.
    6. Pierre-André Chiappori & Murat Iyigun & Yoram Weiss, 2009. "Investment in Schooling and the Marriage Market," American Economic Review, American Economic Association, vol. 99(5), pages 1689-1713, December.
    7. Weiss, Yoram, 1993. "The formation and dissolution of families: Why marry? Who marries whom? And what happens upon divorce," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 3, pages 81-123, Elsevier.
    8. Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2007. "Public Goods, Transferable Utility and Divorce Laws," IZA Discussion Papers 2646, Institute of Labor Economics (IZA).
    9. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541, Elsevier.
    10. Robert Shimer & Lones Smith, 2000. "Assortative Matching and Search," Econometrica, Econometric Society, vol. 68(2), pages 343-370, March.
    11. Leora Friedberg, 1998. "Did Unilateral Divorce Raise Divorce Rates? Evidence from Panel Data," NBER Working Papers 6398, National Bureau of Economic Research, Inc.
    12. Pierre-André Chiappori & Yoram Weiss, 2007. "Divorce, Remarriage, and Child Support," Journal of Labor Economics, University of Chicago Press, vol. 25(1), pages 37-74.
    13. Clark, Simon, 1999. "Law, Property, and Marital Dissolution," Economic Journal, Royal Economic Society, vol. 109(454), pages 41-54, March.
    14. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    15. Luis Rubalcava & Graciela Teruel & Duncan Thomas, 2009. "Investments, Time Preferences, and Public Transfers Paid to Women," Economic Development and Cultural Change, University of Chicago Press, vol. 57(3), pages 507-538, April.
    16. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    17. Imran Rasul, 2006. "The Economics of Child Custody," Economica, London School of Economics and Political Science, vol. 73(289), pages 1-25, February.
    18. Pietro Garibaldi & Giovanni L. Violante, 2005. "The Employment Effects of Severance Payments with Wage Rigidities," Economic Journal, Royal Economic Society, vol. 115(506), pages 799-832, October.
    19. Narayana Kocherlakota & Luigi Pistaferri, 2008. "Household Heterogeneity and Asset Trade: Resolving the Equity Premium Puzzle in Three Countries," Levine's Bibliography 122247000000001886, UCLA Department of Economics.
    20. S. Rao Aiyagari & Jeremy Greenwood & Nezih Guner, 2000. "On the State of the Union," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 213-244, April.
    21. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1.
    22. Browning, Martin & Francois Bourguignon & Pierre-Andre Chiappori & Valerie Lechene, 1994. "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1067-1096, December.
    23. Goldin, Claudia, 1992. "Understanding the Gender Gap: An Economic History of American Women," OUP Catalogue, Oxford University Press, number 9780195072709.
    24. Iyigun, Murat & Walsh, Randall P., 2007. "Endogenous gender power, household labor supply and the demographic transition," Journal of Development Economics, Elsevier, vol. 82(1), pages 138-155, January.
    25. Paul A. Samuelson, 1956. "Social Indifference Curves," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 1-22.
    26. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
    27. Sonia Oreffice, 2007. "Did the legalization of abortion increase women’s household bargaining power? Evidence from labor supply," Review of Economics of the Household, Springer, vol. 5(2), pages 181-207, June.
    28. Bernheim, B Douglas & Bagwell, Kyle, 1988. "Is Everything Neutral?," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 308-338, April.
    29. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
    30. Maurizio Mazzocco, 2007. "Household Intertemporal Behaviour: A Collective Characterization and a Test of Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 857-895.
    31. Imran Rasul, 2006. "Marriage Markets and Divorce Laws," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 30-69, April.
    32. Peter A. Diamond & Eric Maskin, 1979. "An Equilibrium Analysis of Search and Breach of Contract, I: Steady States," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 282-316, Spring.
    33. Niko Matouschek & Imran Rasul, 2008. "The Economics of the Marriage Contract: Theories and Evidence," Journal of Law and Economics, University of Chicago Press, vol. 51(1), pages 59-110, February.
    34. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February.
    35. Blundell,R. W. & Preston,Ian & Walker,Ian (ed.), 1994. "The Measurement of Household Welfare," Cambridge Books, Cambridge University Press, number 9780521451956, January.
    36. Pierre-Andre Chiappori & Yoram Weiss, 2006. "Divorce, Remarriage, and Welfare: A General Equilibrium Approach," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 415-426, 04-05.
    37. Adrian Masters, 2008. "Marriage, Commitment and Divorce in a Matching Model with Differential Aging," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(3), pages 614-628, July.
    38. Mortensen, Dale T, 1988. "Wages, Separations, and Job Tenure: On-the-Job Specific Training or Matching?," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 445-471, October.
    39. Murat Nick & P. Randall Walsh, 2007. "Building the Family Nest: Premarital Investments, Marriage Markets, and Spousal Allocations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(2), pages 507-535.
    40. Bergstrom, Theodore C, 1989. "A Fresh Look at the Rotten Kid Theorem--and Other Household Mysteries," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1138-1159, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aloysius Siow, 2008. "How does the marriage market clear? An empirical framework," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(4), pages 1121-1155, November.
    2. Marcassa Stefania, 2013. "Divorce laws and divorce rate in the US," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 997-1035, August.
    3. Nicholas Jacquemet & Jean-Marc Robin, 2011. "Marriage with Labor Supply," 2011 Meeting Papers 446, Society for Economic Dynamics.
    4. Alessandra Voena, 2015. "Yours, Mine, and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?," American Economic Review, American Economic Association, vol. 105(8), pages 2295-2332, August.
    5. Pierre-André Chiappori & Murat Iyigun & Yoram Weiss, 2009. "Investment in Schooling and the Marriage Market," American Economic Review, American Economic Association, vol. 99(5), pages 1689-1713, December.
    6. Marion Goussé & Nicolas Jacquemet & Jean‐Marc Robin, 2017. "Marriage, Labor Supply, and Home Production," Econometrica, Econometric Society, vol. 85(6), pages 1873-1919, November.
    7. Hans Bloemen & Elena Stancanelli, 2015. "Toyboys or supergirls? An analysis of partners’ employment outcomes when she outearns him," Review of Economics of the Household, Springer, vol. 13(3), pages 501-530, September.
    8. Nicolas Jacquemet & Jean-Marc Robin, 2013. "Assortative matching and search with labor supply and home production," CeMMAP working papers CWP07/13, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    9. Hiller, Victor & Recoules, Magali, 2013. "Changes in divorce patterns: Culture and the law," International Review of Law and Economics, Elsevier, vol. 34(C), pages 77-87.
    10. Safoura Moeeni, 2021. "Married women’s labor force participation and intra-household bargaining power," Empirical Economics, Springer, vol. 60(3), pages 1411-1448, March.
    11. Marion Goussé & Nicolas Jacquemet & Jean-Marc Robin, 2016. "Marriage, Labor Supply, and Home Production: A Longitudinal Microeconomic Analysis of Marriage, Intra-Household Bargaining and Time Use Using the BHPS, 1991-2008," Cahiers de recherche 1601, CIRPEE.
    12. repec:hal:wpspec:info:hdl:2441/eu4vqp9ompqllr09j00420pk7 is not listed on IDEAS
    13. Nicolas Jacquemet & Jean-Marc Robin, 2011. "Marriage with Labor Supply," Post-Print halshs-00639313, HAL.
    14. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09j00420pk7 is not listed on IDEAS
    15. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09j00420pk7 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2008. "An Assignment Model with Divorce and Remarriage," IZA Discussion Papers 3892, Institute of Labor Economics (IZA).
    2. Pierre‐Andre Chiappori & Murat Iyigun & Jeanne Lafortune & Yoram Weiss, 2017. "Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly Formed Partnerships," Economic Journal, Royal Economic Society, vol. 127(604), pages 1874-1905, September.
    3. Iyigun, Murat, 2009. "Marriage, Cohabitation and Commitment," IZA Discussion Papers 4341, Institute of Labor Economics (IZA).
    4. Marcassa Stefania, 2013. "Divorce laws and divorce rate in the US," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 997-1035, August.
    5. Nicolas Jacquemet & Jean-Marc Robin, 2011. "Marriage with Labor Supply," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01073728, HAL.
    6. Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2007. "Public Goods, Transferable Utility and Divorce Laws," IZA Discussion Papers 2646, Institute of Labor Economics (IZA).
    7. Robert A. Pollak, 2019. "How Bargaining in Marriage Drives Marriage Market Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 37(1), pages 297-321.
    8. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1789-1891, Elsevier.
    9. Molina, José Alberto & Gimenez-Nadal, José Ignacio & Velilla, Jorge, 2018. "Intertemporal Labor Supply: A Household Collective Approach," IZA Discussion Papers 11276, Institute of Labor Economics (IZA).
    10. Levin, Mark (Левин, Марк) & Matrosova, Ksenia (Матросова, Ксения), 2018. "Development and Research of Economic Behavior of Households in Changing Conditions [Разработка И Исследование Экономического Поведения Домохозяйств В Изменяющихся Условиях]," Working Papers 041825, Russian Presidential Academy of National Economy and Public Administration.
    11. Tümer Kapan, 2010. "Property Division Laws: The Effects on Labor Supply and Household Bargaining," 2010 Meeting Papers 1127, Society for Economic Dynamics.
    12. Marion Goussé & Nicolas Jacquemet & Jean-Marc Robin, 2016. "Marriage, Labor Supply, and Home Production: A Longitudinal Microeconomic Analysis of Marriage, Intra-Household Bargaining and Time Use Using the BHPS, 1991-2008," Cahiers de recherche 1601, CIRPEE.
    13. Marion Goussé & Nicolas Jacquemet & Jean‐Marc Robin, 2017. "Marriage, Labor Supply, and Home Production," Econometrica, Econometric Society, vol. 85(6), pages 1873-1919, November.
    14. J. Gimenez-Nadal & Jose Molina, 2013. "Parents’ education as a determinant of educational childcare time," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 719-749, April.
    15. Xu, Zeyu, 2007. "A survey on intra-household models and evidence," MPRA Paper 3763, University Library of Munich, Germany.
    16. Matthias Doepke & Michèle Tertilt, 2019. "Does female empowerment promote economic development?," Journal of Economic Growth, Springer, vol. 24(4), pages 309-343, December.
    17. Mikhail Freer & Khushboo Surana, 2021. "Marital Stability With Committed Couples: A Revealed Preference Analysis," Papers 2110.10781, arXiv.org, revised Sep 2024.
    18. Nicolas Frémeaux & Marion Leturcq, 2013. "Plus ou moins mariés : l'évolution du mariage et des régimes matrimoniaux en France," Économie et Statistique, Programme National Persée, vol. 462(1), pages 125-151.
    19. Smith, V. Kerry & Van Houtven, George, 1998. "Non-Market Valuation and the Household," RFF Working Paper Series dp-98-31, Resources for the Future.
    20. Chiappori, Pierre-André & Gimenez-Nadal, José Ignacio & Molina, José Alberto & Theloudis, Alexandros & Velilla, Jorge, 2020. "Intrahousehold Commitment and Intertemporal Labor Supply," IZA Discussion Papers 13545, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    matching; intra-household allocations; Becker-Coase theorem;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3892. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.