Efficiency and the Division of Marital Assets

Phil Curry ()

Discussion Papers from Department of Economics, Simon Fraser University

Abstract: This paper examines the incentives that property division laws can have for divorce and investment in marital assets. This paper considers an environment in which spouses have multiple inputs, such as time and money, to a marital asset but the choices a spouse makes with regards to one input, say time, are not observable to the courts. In such an environment, it is demonstrated that when spouses specialize, as in a traditional family structure, the common-law rule may be efficiency enhancing. However, when both spouses work and strong consumption complementarities are present, equal division leads to more efficient investment in the marital asset. Further, sufficient conditions are found for which the community rule leads to a lower divorce rate than the common-law rule.

Keywords: divorce; efficiency; marital property (search for similar items in EconPapers)
JEL-codes: K36 D13 (search for similar items in EconPapers)
Date: 2008-10

Downloads: (external link)
http://www.econ.sfu.ca/research/RePEc/sfu/sfudps/dp08-05.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:sfu:sfudps:dp08-05

Ordering information: This working paper can be ordered from
Working Paper Coordinator, Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
http://www.econ.sfu. ... lications/index.html

Access Statistics for this paper

More papers in Discussion Papers from Department of Economics, Simon Fraser University
Address: Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
Contact information at EDIRC.
Series data maintained by Working Paper Coordinator ().