Cohabitation, Child Development, and College Costs

Effrosyni Adamopoulou, Anne Hannusch, Karen Kopecky and Tim Obermeier

No 20802, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: US college-educated couples with children marry at higher rates than those without a college degree. We argue that marriage, which entails lower separation risk and more equitable asset division if separation occurs, provides insurance to the lower-earning spouse, facilitating child investment. Investing in children is more valuable for college-educated couples, who are more likely to send their children to college. Using an OLG model of marriage, cohabitation, wealth accumulation, and educational investments where college is costly and completion is risky, we find that high college costs reduce incentives to marry among couples without a college degree. These differences in union choice by education heighten differences in children’s educational attainment and reduce intergenerational mobility.

Keywords: Marriage and cohabitation; Child development; Human capital accumulation; college costs; Intergenerational mobility (search for similar items in EconPapers)
JEL-codes: D15 E24 J12 J22 J24 (search for similar items in EconPapers)
Date: 2025-11
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