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.
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 in Economics University of Sussex
Working Paper details
- Institute for Fiscal Studies
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: 3 December 2023).
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