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Costly Divorce and Marriage Rates

Author

Listed:
  • Yurko, Anna

Abstract

This paper develops a model of choice between marriage and cohabitation to study the effect of divorce costs on marriage decision. The paired agents are heterogeneous, the utility is non-transferable, and break up and divorce decisions are modeled explicitly as unilateral, that is, it takes the decision of only one partner to terminate a relationship. This framework is empirically relevant, since unilateral divorce is legal in many countries, and multiple empirical studies of the effect of changes in divorce laws on divorce rates demonstrate that Coase theorem does not hold (partners cannot bargain efficiently). The model seeks to reconcile the conflicting empirical evidence on the relationship between marriage rates and divorce costs.

Suggested Citation

  • Yurko, Anna, 2012. "Costly Divorce and Marriage Rates," MPRA Paper 37810, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:37810
    as

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    File URL: https://mpra.ub.uni-muenchen.de/37810/1/MPRA_paper_37810.pdf
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    References listed on IDEAS

    as
    1. Giulio Fella & Paola Manzini & Marco Mariotti, 2004. "Does Divorce Law Matter?," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 607-633, June.
    2. Michael J. Brien & Lee A. Lillard & Steven Stern, 2006. "Cohabitation, Marriage, And Divorce In A Model Of Match Quality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(2), pages 451-494, May.
    3. Betsey Stevenson & Justin Wolfers, 2007. "Marriage and Divorce: Changes and their Driving Forces," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 27-52, Spring.
    4. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-1187, December.
    5. Bruce Wydick, 2007. "Grandma was Right: Why Cohabitation Undermines Relational Satisfaction, But Is Increasing Anyway," Kyklos, Wiley Blackwell, vol. 60(4), pages 617-645, November.
    6. Imran Rasul, 2006. "Marriage Markets and Divorce Laws," Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 30-69, April.
    7. Leora Friedberg, 1998. "Did Unilateral Divorce Raise Divorce Rates? Evidence from Panel Data," NBER Working Papers 6398, National Bureau of Economic Research, Inc.
    8. 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.
    9. González, Libertad & Viitanen, Tarja K., 2009. "The effect of divorce laws on divorce rates in Europe," European Economic Review, Elsevier, vol. 53(2), pages 127-138, February.
    10. Brishti Guha, 2010. "Sex Ratios, Divorce Laws and the Marriage Market," Working Papers 28-2010, Singapore Management University, School of Economics.
    11. Justin Wolfers, 2006. "Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results," American Economic Review, American Economic Association, vol. 96(5), pages 1802-1820, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    family economics; marriage; cohabitation; divorce; externalities;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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