Costly Divorce and Marriage Rates

Anna Yurko

MPRA Paper from University Library of Munich, Germany

Abstract: This paper develops a model of choice between marriage and cohabitation to study the effect of divorce costs on marriage decision. The paired agents are heterogeneous, the utility is non-transferable, and break up and divorce decisions are modeled explicitly as unilateral, that is, it takes the decision of only one partner to terminate a relationship. This framework is empirically relevant, since unilateral divorce is legal in many countries, and multiple empirical studies of the effect of changes in divorce laws on divorce rates demonstrate that Coase theorem does not hold (partners cannot bargain efficiently). The model seeks to reconcile the conflicting empirical evidence on the relationship between marriage rates and divorce costs.

Keywords: family economics; marriage; cohabitation; divorce; externalities (search for similar items in EconPapers)
JEL-codes: D62 J12 (search for similar items in EconPapers)
Date: 2012-02-01
New Economics Papers: this item is included in nep-dem
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37810

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