A Human Capital-Based Theory of Postmarital Residence Rules

Matthew Baker and Joyce Jacobsen ()

The Journal of Law, Economics, and Organization, 2007, vol. 23, issue 1, 208-241

Abstract: In premodern societies, the residence of a newly wedded couple is often decided by custom. We formulate a theory of optimal postmarital residence rules based on contracting problems created by the nature of premarriage human capital investments. We argue that a fixed postmarital residence rule may mitigate a holdup problem by specifying marriage terms and limiting possibilities for renegotiation; the trade-off is that the rule may prohibit beneficial renegotiation of postmarital 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 postmarital residence patterns. We find some predictive ability in variables related to outside options, control over the environment, and potential degree of social control. Copyright 2007, Oxford University Press.

Date: 2007
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Citations: View citations in EconPapers (13)

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Working Paper: A Human Capital-Based Theory of Post Marital Residence Rules (2005)
Working Paper: A Human Capital-Based Theory of Post-Marital Residence Rules (2003)
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