Marriage Market, Divorce Legislation, and Household Labor Supply

This paper provides,a theoretical framework,for analyzing,the impact,of the marriage,market,and divorce legislation on household labor supply. In our approach, the sex ratio on the marriage market and the rules governing,divorce,are examples,of,“distribution factors”. The latter are de…ned,as variables that,a¤ect the household,members’,bargaining,position,but neither preferences,nor the joint budget,set. We extend the collective labor supply model developed by Chiappori (JPE, 1992) to allow for distribution factors. We show,that our model,imposes,new,restrictions on the labor supply,functions,and eases the identi…cation,of individual,preferences,and,the intra-household,decision,process. The model,is estimated,using PSID data for the year 1988. Our results do not reject the restrictions imposed by the model. Also, the sex ratio and divorce,laws deemed,favorable,to women,are found,to impact,the labor supply,behavior,and,the decision process in the directions predicted,by the theory,and to have,sizeable e¤ects. This research received …nancial support from le fonds FCAR, the Social Sciences and Humanities Research Council of