Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33447
Authors: 
Iyigun, Murat
Walsh, Randall P.
Year of Publication: 
2005
Series/Report no.: 
IZA Discussion Papers 1752
Abstract: 
We develop a model of the household in which spousal incomes are determined by pre-marital investments, the marriage market is characterized by assortative matching, and endogenously-determined sharing rules form the basis of intra-household allocations. By incorporating pre-marital investments and spousal matching into the collective household model, we are able to identify the fundamental determinants of endogenously determined and maritally sustainable intra-marital sharing rules. In particular, we find that all sharing rules along the assortative order support unconditionally efficient outcomes where both pre-marital investments and intra-household allocations are efficient. The efficiency of both pre-marital choices and household allocations then enables us to show that, for each couple, the marriage market generates a unique and maritally sustainable sharing rule that is a function of the distribution of pre-marital endowments and the sex ratios in the market.
Subjects: 
collective model
marriage
bargaining
household labor supply
JEL: 
C78
D61
D70
Document Type: 
Working Paper

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