Divorce and the Option Value of Marital Search
This works tests whether or not the introduction of divorce law changes the timing of marital search. Common sense suggests that rational agents should adjust to the divorce risk by increasing the average length of search spell, whereas the option value theory stresses the role played by irreversible investments: in this case, the new exit option available to married partners should result in shorter search spells. Using a dynamic model of marital search, a new dataset of retrospective individual Italian data, and two robust statistical specifications based upon the Before-After estimator, we find strong evidence that the legal innovation actually lowered the age at marriage, thereby worsening the level of marital matching, and possibly reinforcing self-fulfilling prophecies of divorce.
|Date of creation:||Mar 2007|
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- Weiss, Y. & Willis, R.J., 1995.
"Match Quality, New Information and Marital Dissolution,"
33-95, Tel Aviv - the Sackler Institute of Economic Studies.
- Weiss, Yoram & Willis, Robert J, 1997. "Match Quality, New Information, and Marital Dissolution," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages S293-329, January.
- Yoram Weiss & Robert J. Willis, . "Match Quality, New Information and Marital Dissolution," University of Chicago - Population Research Center 95-13, Chicago - Population Research Center.
- Weiss, Y., 1993.
"The Formation and Dissolution of Families: Why Marry? Who Maries Whom? and what Happens Upon Divorce?,"
15-93, Tel Aviv.
- 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.
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