Household relational contracts for marriage, fertility and divorce

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3655

Classification and Topics

• Classification: Wirtschaft ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Household Production and Intrahousehold Allocation ; Marriage; Marital Dissolution; Family Structure; Domestic Abuse ; Fertility; Family Planning; Child Care; Children; Youth ; Human Capital; Skills; Occupational Choice; Labor Productivity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fahn, Matthias ; Rees, Ray
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/53137
• Last update: 10.03.2025, 11:43 AM CET