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Are Intra-Household Allocations Policy Neutral? Theory and Empirical Evidence

Author

Listed:
  • Chiappori, Pierre-André

    () (Columbia University)

  • Iyigun, Murat

    () (University of Colorado, Boulder)

  • Lafortune, Jeanne

    () (Pontificia Universidad Catolica de Chile)

  • Weiss, Yoram

    () (Tel Aviv University)

Abstract

We develop a collective household model with spousal matching in which there exists marital gains to assortative matching and marriage quality for each couple is revealed ex post. Changes in alimony laws are shown to affect existing couples and couples-to-be differently. For existing couples, legislative changes that favor (wo)men benefit them especially if the marriage match quality is low, while, for couples not yet formed, they generate offsetting intra-household transfers and lower intra-marital allocations for the spouses who are the intended beneficiary. We then estimate the effect of granting alimony rights to cohabiting couples in Canada using a triple-difference framework since each province extended these rights in different years and requiring different cohabitation length. We find that obtaining the right to petition for alimony led women to lower their labor force participation. These results, however, do not hold – and, in some cases, are reversed – for newly formed cohabiting couples.

Suggested Citation

  • Chiappori, Pierre-André & Iyigun, Murat & Lafortune, Jeanne & Weiss, Yoram, 2011. "Are Intra-Household Allocations Policy Neutral? Theory and Empirical Evidence," IZA Discussion Papers 5594, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5594
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Are Intra-Household Allocations Policy Neutral? Theory and Empirical Evidence
      by maximorossi in NEP-LTV blog on 2011-04-04 22:33:42

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    Cited by:

    1. Grossbard, Shoshana & Vernon, Victoria, 2014. "Common Law Marriage and Male/Female Convergence in Labor Supply and Time Use," IZA Discussion Papers 7937, Institute for the Study of Labor (IZA).
    2. Schaubert, Marianna, 2018. "Do Alimony Regulations Matter inside Marriage? Evidence from the 2008 Reform of the German Maintenance Law," EconStor Preprints 173193, ZBW - German National Library of Economics.

    More about this item

    Keywords

    intra-household allocations; matching; cohabitation; alimony laws;

    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

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