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Marriage matching, risk sharing and spousal labor supplies

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  • Eugene Choo
  • Shannon Seitz
  • Aloysius Siow

Abstract

This paper develops the collective marriage matching model, a behavioral and empirically flexible framework that incorporates both marriage matching and intrahousehold allocations. The model shows how marriage market equilibrium and bargaining power within the family are simultaneously determined. The framework provides a solution to the problem of incorporating substitute sex ratios in empirical models of spousal labor supplies. Using data from the US 2000 census, the empirical results show that changes in marriage market tightness, the ratio of unmarried men to unmarried women, have large estimated effects on spousal labor force participation rates, and smaller effects on hours of work and hours in home production. Controlling for variation in labor market conditions across marriage markets has substantive implications for the parameter estimates.

Suggested Citation

  • Eugene Choo & Shannon Seitz & Aloysius Siow, 2008. "Marriage matching, risk sharing and spousal labor supplies," Working Papers tecipa-332, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-332
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    References listed on IDEAS

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    1. 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.
    2. M. Browning & P. A. Chiappori, 1998. "Efficient Intra-Household Allocations: A General Characterization and Empirical Tests," Econometrica, Econometric Society, vol. 66(6), pages 1241-1278, November.
    3. Del Boca, Daniela & Flinn, Christopher, 2005. "Household Time Allocation and Modes of Behavior: A Theory of Sorts," IZA Discussion Papers 1821, Institute for the Study of Labor (IZA).
    4. 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.
    5. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2007. "Collective Labour Supply: Heterogeneity and Non-Participation," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 417-445.
    6. Josh Angrist, 2002. "How Do Sex Ratios Affect Marriage and Labor Markets? Evidence from America's Second Generation," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 997-1038.
    7. Grossbard-Shechtman, Shoshana Amyra, 1984. "A Theory of Allocation of Time in Markets for Labour and Marriage," Economic Journal, Royal Economic Society, vol. 94(376), pages 863-882, December.
    8. Jeanne Lafortune, 2013. "Making Yourself Attractive: Pre-marital Investments and the Returns to Education in the Marriage Market," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 151-178, April.
    9. Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
    10. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 969-1006.
    11. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    12. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    13. Michael Baker & Emily Hanna & Jasmin Kantarevic, 2004. "The Married Widow: Marriage Penalties Matter!," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 634-664, June.
    14. Chiappori, Pierre-André & Fortin, Bernard & Lacroix, Guy, 1998. "Household Labor Supply, Sharing Rule and the Marriage Market," Cahiers de recherche 9810, Université Laval - Département d'économique.
    15. Shelly Lundberg & Robert A. Pollak, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-158, Fall.
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    Cited by:

    1. Loren Brandt & Aloysius Siow & Carl Vogel, 2009. "Large Demographic Shocks and Small Changes in the Marriage Market," CEPR Discussion Papers 615, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    2. Alessandra Voena, 2011. "Yours, Mine and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?," Discussion Papers 10-022, Stanford Institute for Economic Policy Research.
    3. Aloysius Siow, 2015. "Testing Becker's Theory of Positive Assortative Matching," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 409-441.
    4. 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.
    5. John A. Knowles, 2013. "Why are Married Men Working So Much? An Aggregate Analysis of Intra-Household Bargaining and Labour Supply," Review of Economic Studies, Oxford University Press, vol. 80(3), pages 1055-1085.
    6. Eugene Choo & Aloysius Siow, 2006. "Estimating a marriage matching model with spillover effects," Demography, Springer;Population Association of America (PAA), vol. 43(3), pages 463-490, August.

    More about this item

    Keywords

    marriage matching; intrahousehold allocations; spousal labor supplies; collective model; Choo Siow;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General

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