A Human Capital-Based Theory of Post Marital Residence Rules

Matthew Baker and Joyce Jacobsen ()

No 2005-006, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics

Abstract: In pre-modern societies the residence of a newly-wedded couple is often decided by custom. We formulate a theory of optimal post-marital residence rules based on contracting problems created by the nature of pre-marriage human capital investments. We argue that a fixed post-marital residence rule may mitigate a hold-up problem by specifying marriage terms and limiting possibilities for renegotiation; the trade-off is that the rule may prohibit beneficial renegotiation of post-marital location. A point of interest of our approach is that the magnitude and direction of transfers accompanying marriage are endogenous. We apply our theoretical results to understanding cross-cultural post-marital residence patters. We find some predictive ability in variables related to outside options, control over the environment, and potential degree of social control.

Keywords: Marriage; Bargaining; Hold-up Problem; Dowry; Bride-Price (search for similar items in EconPapers)
JEL-codes: J12 J41 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2005-09
New Economics Papers: this item is included in nep-hrm
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Published in Journal of Law, Economics, and Organization, April 2007, 23 (1): 208-241

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http://repec.wesleyan.edu/pdf/jjacobsen/2005006_jacobsen.pdf (application/pdf)

Related works:
Journal Article: A Human Capital-Based Theory of Postmarital Residence Rules (2007)
Working Paper: A Human Capital-Based Theory of Post-Marital Residence Rules (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wes:weswpa:2005-006

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