Household relational contracts for marriage, fertility and divorce

Fahn, Matthias und Rees, Ray (2011): Household relational contracts for marriage, fertility and divorce. CESifo Working Paper: Public Finance,

Abstract

This paper applies the theory of relational contracts to a model in which a couple decides whether to marry or cohabit, how many children to have and subsequently whether to stay together or separate. We make precise the idea that cooperation in a household can be supported by self interest. Since the costs of raising children are unequally distributed among partners, there is a potential conflict between individually optimal and efficient, i.e. surplus maximizing, decisions. Side-payments are used to support cooperation but are not legally enforceable and thus have to be part of an equilibrium. This requires a stable relationship and credible punishment threats. Within this relational contracts framework, we analyze the effects of policy variables such as rights of access to children post-separation and wealth division/alimony rules, as well as the legal costs of divorce, on the interrelationships among the decisions on marriage, fertility and divorce.

• Dokumententyp: Paper
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Organisationsökonomik ; Volkswirtschaft > Lehrstühle > Seminar für Versicherungswissenschaft (aufgelöst)
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• Sprache: Englisch