This paper proposes and estimates a static non-parametric transferable utility model of the marriage market. The model rationalizes the standard interpretation of marriage rate regressions as well as pointing out its limitations. The model was used to estimate US marital behavior in 1971/72 and 1981/82. The estimates show that the gains to marriage for young adults fell substantially over the decade. It also showed that the legalization of abortion had a significant quantitative impact on the fall in the gains to marriage for young adults.

No abstract

This paper studies premarital parental investments in children's wealth, where spousal wealth is a public good in marriage. By investing in their children's wealth, parents increase the wealth of their children and the quality of the spouses that their children can marry. In large marriage markets, the hedonic return to investment internalizes all the external benefits of premarital investment in wealth so that the competitive equilibrium is efficient. Marriage market competition also increases investments in small marriage markets relative to no competition, but equilibrium investments are not efficient.

This paper estimates the effects of federal research funding on research outcomes at 68 research universities. We provide a new interpretation of the instrumental variable estimate of the coefficient in a regression of the output of an institution on an input. Absent parameter heterogeneity, it captures the total change in output when an institution obtains an additional unit of the input that may be correlated with the other inputs that affect the output measure. Our instrument for research funding is alumni representation on U.S. Congressional appropriations committees. Our results suggest an increase of $1 million in federal research funding (1996$) to a university results in 10 more articles and 0.2 more patents. The change in citations per article is negative but very small and imprecisely measured. As a first approximation, increasing federal research funding on the margin results in more, but not necessarily higher quality, research output.Note: These universities have members of Congress serving on the appropriations committees who received an undergraduate degree from the institution. Note we may have data on publications and/or patents for a given university; if, however, during the period covered by these measures there was no change in the appropriations committee membership by alumni, the data for this university were not included in the analysis.

This paper tests the rational expectations lifecycle model of consumption against (1) a simple Keynesian model and (ii) the rational expectations lifecycle model with imperfect capital markets. The tests are based upon the relative responsiveness of consumption to income changes which can be predicted from past information and income changes which cannot be predicted. Since there is strong evidence that panel data contains substantial measurement error, the tests are especially constructed to allow for measurement error in the income process. They also allow for more general income processes than have been considered to date in the literature. The results reject the Keynesian model and generally support the lifecycle model, although the tests are not sufficiently precise to rule out the possibility that some households are liquidity constrained. Measurement error does have a strong influence on the relationship between consumption and income. When it is ignored our tests do not reject the Keynesian model. We show that consideration of measurement error may also reconcile differences in the results of Hall and Mishkin (1982) and Bernanke (1984). Nevertheless, our most important conclusion is that Hall and Mishkin's, Bernanke's, and Hayashi's (198) qualitative finding that the vast majority of households obey the lifecycle model is not an artifact of failure to account for measurement error in the income data.