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 between partners and children are a household public good, there is a conflict between individually optimal and efficient, i.e. surplus maximising, 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 framework, we analyze the effects of policy variables such as the costs of divorce and post-divorce income payments on the interrelationships among the decisions on marriage, fertility and divorce.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Munich Discussion Paper ; No. 2014-13

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
• Subject: relational contracts ; cohabitation ; marriage ; fertility ; divorce

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fahn, Matthias ; Rees, Ray
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (where): München
• (when): 2014

Further information

• DOI: doi:10.5282/ubm/epub.20834
• Handle: http://hdl.handle.net/10419/104423
• URN: urn:nbn:de:bvb:19-epub-20834-0
• Last update: 10.03.2025, 11:42 AM CET