United but (un)equal: human capital, probability of divorce, and the marriage contract

Abstract

This paper studies how the risk of divorce affects the human capital decisions of a young couple. We consider a setting where complete specialization is optimal with no divorce risk. Couples can self-insure through savings which offers some protection to the uneducated spouse, but at the expense of a distortion. Alternatively, for large divorce probabilities, symmetry in education, where both spouses receive an equal amount of education, may be optimal. This eliminates the risk associated with the lack of education, but reduces the efficiency of education choices. We show that the symmetric allocation will become more attractive as the probability of divorce increases, if risk aversion is high and/or labor supply elasticity is low. However, it is only a "second-best" solution as insurance protection is achieved at the expense of an efficiency loss. Finally, we study how the (economic) use of marriage is affected by the possibility of divorce.

Influence of Legal Traditions and Legal Culture on the Institution of Marriage Contracts and the Possibility of its Improvement: The Experience of Kazakhstan

“…When evaluating legal development, including in the field of marriage and family relations, it is worth considering the difference in socio-cultural worlds with specific ideas about personal worldviews, the conditions of one's existence, and related forms of family life. At the same time, a similar level of education among spouses, as shown in the following studies (Cremer, Pestieau, & Roeder, 2015;Kapustina, 2021), helps overcome some stereotypes, thereby not perceiving the marriage contract as a document regulating property rights during divorce.…”