Household Relational Contracts for Marriage, Fertility and Divorce

Matthias Fahn and Ray Rees

No 3655, CESifo Working Paper Series from CESifo

Abstract: This paper applies the theory of relational contracts to a model in which a couple decides whether to marry or cohabit, how many children to have and subsequently whether to stay together or separate. We make precise the idea that cooperation in a household can be supported by self interest. Since the costs of raising children are unequally distributed among partners, there is a potential conflict between individually optimal and efficient, i.e. surplus maximizing, decisions. Side-payments are used to support cooperation but are not legally enforceable and thus have to be part of an equilibrium. This requires a stable relationship and credible punishment threats. Within this relational contracts framework, we analyze the effects of policy variables such as rights of access to children post-separation and wealth division/alimony rules, as well as the legal costs of divorce, on the interrelationships among the decisions on marriage, fertility and divorce.

JEL-codes: C73 D13 J12 J13 J24 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Household Relational Contracts for Marriage, Fertility and Divorce (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3655

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