Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/75864 
Authors: 
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper No. 555
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper considers family formation and reciprocity-based cooperation in the form of sharing of earnings-risk. While risk sharing is one benefit to marriage it is also limited by divorce risk. With search in the marriage market there may be multiple equilibria diering not only in divorce rates but also in the role of marriage in providing informal insurance. Publicly provided insurance, despite potential equilibrium multiplicity, is shown to aect family formation and financial cooperation monotonically. Some aspects of the model are then tested using international survey data and a bivariate probit model with sample selection.
Subjects: 
Marriage
divorce
risk-sharing
Document Type: 
Working Paper
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