Cohabitation, child development, and college costs

Effrosyni Adamopoulou, Anne Hannusch, Karen A. Kopecky and Tim Obermeier

No 25-035, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Why do US college-educated couples with children marry at higher rates than those without a college degree? We argue that investing in children is more valuable for college-educated couples, who are more likely to send their children to college. Marriage, which entails lower separation risk and more equal asset division if separation does occur, provides insurance to the lower-earning spouse, which facilitates child investment. Using an OLG model of marriage, cohabitation, wealth accumulation, and educational investments where college completion is risky, we find that insurance through marriage is particularly important when investing in children is costly and college costs are high.

Keywords: cohabitation; marriage; child development; time and money investments; human capital accumulation; college costs (search for similar items in EconPapers)
JEL-codes: D15 E24 J12 J22 J24 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-dge and nep-lma
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