A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
Relational contracts for household formation, fertility choice and separation
Abstract This paper applies the theory of relational contracts to a model in which a couple decides upon fertility and subsequently on continuation of the relationship. We formalize the idea that within-household-cooperation can be supported by selfinterest. Since the costs of raising children—a household public good—are unequally distributed between partners, a conflict between individually optimal and efficient decisions exists. Side-payments can support cooperation but are not legally enforceable and thus have to be part of an equilibrium. This requires stable relationships and credible punishment threats.Within this framework, we analyze the effects of separation costs and post-separation alimony payments on couples’ fertility decisions. We derive the predictions that higher separation costs and higher alimony payments facilitate cooperation and hence increase fertility. We present empirical evidence based on a recent German reform that reduced rights to post-divorce alimony payments. We find that this reform reduced in-wedlock fertility.
Relational contracts for household formation, fertility choice and separation
Abstract This paper applies the theory of relational contracts to a model in which a couple decides upon fertility and subsequently on continuation of the relationship. We formalize the idea that within-household-cooperation can be supported by selfinterest. Since the costs of raising children—a household public good—are unequally distributed between partners, a conflict between individually optimal and efficient decisions exists. Side-payments can support cooperation but are not legally enforceable and thus have to be part of an equilibrium. This requires stable relationships and credible punishment threats.Within this framework, we analyze the effects of separation costs and post-separation alimony payments on couples’ fertility decisions. We derive the predictions that higher separation costs and higher alimony payments facilitate cooperation and hence increase fertility. We present empirical evidence based on a recent German reform that reduced rights to post-divorce alimony payments. We find that this reform reduced in-wedlock fertility.
Relational contracts for household formation, fertility choice and separation
Fahn, Matthias (author) / Rees, Ray (author) / Wuppermann, Amelie (author)
2015
Article (Journal)
Electronic Resource
English
RVK:
ELIB39
/
ELIB45
Local classification FBW:
oek 2608
BKL:
74.80
Demographie
/
83.31$jWirtschaftswachstum
/
74.80$jDemographie$XGeographie
/
83.31
Wirtschaftswachstum
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