The marriage market, labour supply and education choice

Abstract

We develop an equilibrium lifecycle model of education, marriage and 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.Acknowledgements: This research has greatly benefited from discussions with

Household Financial Decision-Making Models: Which to Choose for Experimental Investigation

“…The point of intersection T in the Fig. 1 represents the threat point 7 , which expresses the utility gained by each individual in case of the cooperation collapse. The woman will not agree to outcomes below M* as this outcome will make her worse than threat point.…”

“…A household is an initial economic unit at the microeconomic level, which makes its financial decisions under constraints and in turn influence other economic units both on the microeconomic and macroeconomic levels. The utility of the household, which in theory has to be maximized by its rational members, has been and still is the one of the issues of a great interest for the researchers (Becker, 1991;Neuwirth, Haider, 2004;Bertocchi et al, 2014;Chiappori et al, 2015;Saelens, 2019, and others). As decisionmaking process within households is in the sphere of concern for policy makers on the government level (Le Cacheux, 2005;Himmelweit et al, 2013) and practically all products and services suppliers, modelling of that process is helpful and virtually inevitable for understanding the preferences and sharing of resources in potentially conflicting within-household relations.…”

“…The aim of the research is to extract the decision-making model of the household suitable for applying in experimental investigation of financial decision making 3 based on the previous research studies (Becker, 1991;Neuwirth, Haider, 2004;Bertocchi et al, 2014;Browning et al, 2011;Chiappori et al, 2015). Experimental investigations are made using experimental methods in order to testify theoretical predictions by gathering empirical evidence in laboratories (Friedman, Sunder, 1994;Nikiforakis, 2010).…”

EDAMBA 2022: Conference Proceedings

“…The aim of the research is to extract the decision-making model of the household suitable for applying in experimental investigation of financial decision making 3 based on the previous research studies (Becker, 1991;Neuwirth, Haider, 2004;Bertocchi et al, 2014;Browning et al, 2011;Chiappori et al, 2015). Experimental investigations are made using experimental methods in order to testify theoretical predictions by gathering empirical evidence in laboratories (Friedman, Sunder, 1994;Nikiforakis, 2010).…”