Working Paper: NBER ID: w21004
Authors: Pierrandre Chiappori; Monica Costa Dias; Costas Meghir
Abstract: We develop an equilibrium lifecycle model of education, marriage and labor supply and consumption in a transferable utility context. Individuals start by choosing their investments in education anticipating returns in the marriage market and the labor market. They then match based on the economic value of marriage and on preferences. Equilibrium in the marriage market determines intrahousehold allocation of resources. Following marriage households (married or single) save, supply labor and consume private and public commodities under uncertainty. Marriage thus has the dual role of providing public goods and offering risk sharing. The model is estimated using the British HPS.
Keywords: Marriage Market; Labor Supply; Education Choice; Human Capital
JEL Codes: H31; J12; J16; J22; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Educational investments (I26) | Labor market returns (J29) |
| Educational investments (I26) | Marriage market outcomes (J12) |
| Higher human capital (J24) | Better matching outcomes in the marriage market (C78) |
| Better matching outcomes in the marriage market (C78) | Intrahousehold resource allocation (D13) |
| Educational choices (I21) | Expectations of future returns in labor and marriage markets (J49) |
| Tax reforms (H29) | Labor supply decisions (J22) |
| Tax reforms (H29) | Marriage market behaviors (J12) |
| Labor supply decisions (J22) | Returns to education (I26) |
| Marriage market behaviors (J12) | Returns to education (I26) |