Are Intra-Household Allocations Policy Neutral? Theory and Empirical Evidence

Pierre Chiappori, Murat Iyigun, Jeanne Lafortune and Yoram Weiss

No 5594, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop a collective household model with spousal matching in which there exists marital gains to assortative matching and marriage quality for each couple is revealed ex post. Changes in alimony laws are shown to affect existing couples and couples-to-be differently. For existing couples, legislative changes that favor (wo)men benefit them especially if the marriage match quality is low, while, for couples not yet formed, they generate offsetting intra-household transfers and lower intra-marital allocations for the spouses who are the intended beneficiary. We then estimate the effect of granting alimony rights to cohabiting couples in Canada using a triple-difference framework since each province extended these rights in different years and requiring different cohabitation length. We find that obtaining the right to petition for alimony led women to lower their labor force participation. These results, however, do not hold – and, in some cases, are reversed – for newly formed cohabiting couples.

Keywords: cohabitation; matching; intra-household allocations; alimony laws (search for similar items in EconPapers)
JEL-codes: J12 J16 J24 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2011-03
New Economics Papers: this item is included in nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: Economic Journal, 2017, 127 (604), 1874-1905.

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