Collateralized Marriage
American Economic Journal: Applied Economics
vol. 15,
no. 4, October 2023
(pp. 252-91)
Abstract
Marriage rates have become increasingly stratified by homeownership. We investigate this in a household model where investments in public goods reduce future earnings and, thus, divorce risk creates inefficiencies. Access to a joint savings technology, like a house, collateralizes marriage, providing insurance to the lower-earning partner and increasing specialization, public goods, and value from marriage. We use idiosyncratic variation in housing prices to show that homeownership access indeed leads to greater specialization. The model also predicts that policies that erode the marriage contract in other ways will make wealth a more important determinant of marriage, which we confirm empirically.Citation
Lafortune, Jeanne, and Corinne Low. 2023. "Collateralized Marriage." American Economic Journal: Applied Economics, 15 (4): 252-91. DOI: 10.1257/app.20210614Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D86 Economics of Contract: Theory
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- H41 Public Goods
- J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
- R31 Housing Supply and Markets
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