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The Marriage Market, Labor Supply and Education Choice

We develop an equilibrium lifecycle model of education, marriage, labor supply and consumption in a transferable utility context. Individuals start by choosing their investments in education anticipating returns in the marriage market and the labor market. They then match based on the economic value of marriage and on preferences. Equilibrium in the marriage market determines intrahousehold allocation of resources. Following marriage households (married or single) save, supply labor and consume private and public commodities under uncertainty. Marriage thus has the dual role of providing public goods and offering risk sharing. The model is estimated using the British HPS. 

Authors: 
Pierre-André Chiappori, Columbia University
Monica Costa Dias, Institute for Fiscal Studies, Centre for Economics and Finance
Costas Meghir, Yale University
Publication Date: 
November, 2016
HCEO Working Groups: 
Publication Status: 
Document Number: 
2016-028
File Description: 
First version, November 21, 2016