Abstract
We develop an equilibrium life cycle model of education, marriage, labor supply, and consumption in a transferable utility context. Individuals start by choosing their investments in education anticipating returns in the marriage market and the labor market. They then match on the basis of the economic value of marriage and preferences. Equilibrium in the marriage market determines intrahousehold allocation of resources. Following marriage households (married or single) save, supply labor, and consume private and public commodities under uncertainty. Marriage thus has the dual role of providing public goods and offering risk sharing. The model is estimated using the British Household Panel Survey.
| Original language | English |
|---|---|
| Pages (from-to) | S26-S72 |
| Journal | Journal of Political Economy |
| Volume | 126 |
| DOIs | |
| Publication status | Published - 1 Oct 2018 |
Bibliographical note
Funding Information:This research has greatly benefited from discussions with Jim Heckman, Ana Reynoso, Jeremy Fox, Ilse Lindenlaub, Bob Polak, and Harald Uhlig. We thank six anonymous referees for their detailed and constructive comments, as well as participants in seminars at the University of Chicago, the Becker Friedman Institute conference in honor of Gary Becker and the conference in honor of Martin Browning, Rice University, the University of Washington in St. Louis, and the Human Capital and Economic Opportunity workshop on Human Capital Formation and Family Economics. Monica Costa Dias thanks the Economic and Social Research Council for funding (awards ES/N015304/1, ES/K00624X/1,
Funding Information:
and ES/M010147/1). Costas Meghir thanks the Cowles Foundation and the Institution for Social and Policy Studies for funding. Pierre-André Chiappori thanks the National Science Foudation (award 1124277) for funding. The usual disclaimer applies.
Funding Information:
This research has greatly benefited from discussions with Jim Heckman, Ana Reynoso, Jeremy Fox, Ilse Lindenlaub, Bob Polak, and Harald Uhlig. We thank six anonymous referees for their detailed and constructive comments, as well as participants in seminars at the University of Chicago, the Becker Friedman Institute conference in honor of Gary Becker and the conference in honor of Martin Browning, Rice University, the University of Washington in St. Louis, and the Human Capital and Economic Opportunity workshop on Human Capital Formation and Family Economics. Monica Costa Dias thanks the Economic and Social Research Council for funding (awards ES/N015304/1, ES/K00624X/1, and ES/M010147/1). Costas Meghir thanks the Cowles Foundation and the Institution for Social and Policy Studies for funding. Pierre-André Chiappori thanks the National Science Foudation (award 1124277) for funding. The usual disclaimer applies.
Publisher Copyright:
© 2018 by The University of Chicago. All rights reserved.