Downloads

Download working paper here
PDF | 1.2 MB
To analyze the impact of changes in the value of marriage on household decisions, we present a limited commitment framework of household behavior in which decisions are made regarding labor supply, divorce and housing demand over the lifecycle. We identify and estimate our structural model using exogenous variation in female labor supply and divorce rates due to the White v. White case in England. We conclude that limited commitment dampens the added worker effect, while the changes in the value of marriage due to a housing price shock have an asymmetric impact on individual welfare both across gender and marital state. We also show that tightening the credit market in different ways can lead to opposite behavior in terms of household savings andfemale labor supply.
Authors

Research Associate Université libre de Bruxelles
Bram is a Research Associate of the IFS, a Professor of Economics at ULB and a Professor of Mathematics and Statistics at KU Leuven.

PhD Candidate European Center for Advanced Research in Economics and Statistics

Senior Lecturer University of Sussex
Tom is a Senior Lecturer in Economics at the University of Sussex and Research Associate at the Institute for Fiscal Studies (IFS).
Working Paper details
- DOI
- 10.1920/wp.ifs.2023.3523
- Publisher
- Institute for Fiscal Studies
Suggested citation
B, De Rock and M, Kovaleva and T, Potoms. (2023). A spouse and a house are all we need? Housing demand, labor supply and divorce over the lifecycle. 23/35. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/spouse-and-house-are-all-we-need-housing-demand-labor-supply-and-divorce-over (accessed: 15 June 2025).
More from IFS
Understand this issue

Buying a home in London in your twenties is difficult, but not impossible
Foregoing a degree for an apprenticeship, saving during Covid and being born and bred in the capital have helped. With sky-high rents, others are not.
25 November 2024

Sure Start’s wide-ranging and long-lasting benefits highlight the impact of integrated early years services
Over the long run, Sure Start’s financial benefits could be twice as high as its costs
22 May 2025

How is tax damaging the housing market?
We discuss how taxes like capital gains, stamp duty, and council tax impact the housing market, affecting affordability, renting, and homeownership.
18 December 2024
Policy analysis

Working in your 60s: a way to stay young for some
On average, women who remained in work for longer following increases in the state pension age saw improved cognition and less physical disability.
13 May 2025

Here’s a pension tweak for nudging civil servants to work past 60
Public sector pension rules are a mess that helps neither workers nor the government. Fixing them could be a win-win.
28 April 2025

Popularity of new childcare entitlements could leave spending much higher than initially forecast
New childcare entitlements have proven popular – meaning spending from 2026 onwards could be £1 billion higher than originally forecast.
12 June 2025
Academic research

Housing wealth, marital stability and labor supply: an intertemporal analysis
We study how house price shocks affect marital stability and household labor supply.
28 March 2025

Consumer bankruptcy, mortgage default, and labor supply
We specify and estimate a life-cycle model of consumption, housing demand, and labor supply using data on credit reports combined with Census data.
14 April 2025

Interpreting Cohort Profiles of Life Cycle Earnings Volatility
We present new estimates of earnings volatility over time and the life cycle by race and human capital, using Social Security earnings.
7 May 2025