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A Theory of Marriage, Labor and Divorce

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A Theory of Marriage, Labor and Divorce Munich Personal RePEc Archive On the Economics of Marriage - A Theory of Marriage, Labor and Divorce. Grossbard, Shoshana San Diego State University 1993 Online at https://mpra.ub.uni-muenchen.de/81832/ MPRA Paper No. 81832, posted 09 Oct 2017 13:20 UTC ON THE ECONOMICS OF MARRIAGE A THEORY OF MARRIAGE, LABOR, AND DIVORCE Second Edition Shoshana Grossbard Springer Publishing In memory of my parents, Chaim Yehoshua and Chana Grossbard, who had the courage to have children after their mothers--Shoshana Propper and Esther Grossbard--perished in Auschwitz. Contents List of Tables and Figures ix Preface xiii Acknowledgments xvii INTRODUCTION 1 PART ONE The Economics of Marriage in Perspective 5 1 The Economics of Marriage and Other Social Sciences 7 2 The Economics of Marriage and Belief Systems 17 PART TWO A General Theory of Marriage 23 3 A Theory of Allocation of Time in Markets for Labor and Marriage 25 4 Theoretical Implications for Marriage 54 PART THREE Sex Ratio Effects 85 5 Sex Ratios and Marriage, Cohabitation, Labor Supply, and Divorce: Time Trends 87 6 Sex Ratios and Married Women's Labor vii viii Contents Supply--Cross-City Comparisons 104 PART FOUR Compensating Differentials in Marriage 131 7 Compensating Differentials in Marriage and Married Women's Labor Supply, with Shoshana Neuman 133 8 Compensating Differentials and Intermarriage 142 PART FIVE Cohabitation, Divorce, and Polygamy 159 9 A Theory of Cohabitation and Marriage Formality 161 10 A Theory of Divorce and Labor Supply, with Michael C. Keeley 182 11 A Theory of Polygamy 214 PART SIX Marriage, Productivity, and Earnings 241 12 Investments in Spouse's Productivity at Work 243 13 A Market Theory of Virtue as General Human Capital 257 14 A Study of Spousal Help Among Israeli Managers, with Dafna N. Izraeli and Shoshana Neuman 272 15 Religiosity and Investments in Spousal Productivity, with Shoshana Neuman 290 CONCLUSION 303 References 307 About the Book and Author 335 Index 337 Tables and Figures Tables 3.1 Traditional labor supply theory vs. general theory of marriage 36 4.1 Aspects of marriage--hypothesis numbers 59 6.1 Means and standard deviations--white women ages 25-34, U.S. cities in 1930 114 6.2 Regressions of labor force participation--married women ages 25-34, U.S. cities in 1930 117 6.3 Regressions of net labor force participation--married women ages 25-34, U.S. cities in 1930 118 6.4 Definitions, means and standard deviations for various samples, U.S. cities in 1980 121 6.5 Regressions of participation in the labor force--all women and foreign-born women, U.S. cities in 1980 124 6.6 Regressions of participation in the labor force-- married white women with low education, ages 25-28, U.S. cities, 1980 125 7.1 Means and definitions of the variables, Israeli couples, 1974 137 7.2 Regressions of wife's labor force participation, Israeli couples, 1974 139 8.1 Definitions, means and standard deviations, National Jewish Population Survey, 1972 148 8.2 Regressions of likelihood of Jewish man marrying exogamously by knowledge of Hebrew 150 9.1 Ratio of informally married to formally married women, North America, 1974 162 9.2 Means and standard deviations of socioeconomic indicators, 6 Guatemalan villages, 1974 170 9.3 Simple correlations with marriage type and female schooling 172 9.4 Regressions of marriage formality for subsample 1 174 x Tables and Figures xi 9.5 Regressions of marriage formality, first marriages 176 9.6 Regressions of marriage formality, salaried males 177 10.1 Means and labor supply responses--reduced forms, NIT experiments, Denver-Seattl 10.2 Labor supply response as a function of predicted marital status and eligibility for treatment, Denver-Seattle, 1970-78 205 10.3 Variables in the control set 212 10.4 Variables related to eligibility 213 11.1 Means and standard deviations in two sets of data on Maiduguri, Nigeria, 1973 225 11.2 Regressions of number of wives for two samples, Maiduguri, 1973 228 11.3 Probit regressions of "divorce", Maiduguri, Cohen data, 1973 232 14.1 Predictors of spousal help by theoretical perspective 275 14.2 Sample characteristics: means and standard deviations, Israeli managers, 1987 280 14.3 Pearson correlations between perceived spousal support and type of assistance, by gender 281 14.4 Linear regressions of spousal help, by gender, Israeli managers, 1987 284 14.5 Logit regressions of spousal help, by gender, Israeli managers, 1987 286 15.1 Israeli men's religious practices, means and variances, 1968 299 15.2 Regressions of Israeli men's religious practices, 1968 300 Figures 3.1 Individual supplies of household labor and labor 31 3.2 Markets for female spousal labor, male spousal labor, female labor, and male labor 34 3.3 Labor supply elasticity for two groups of women 44 3.4 Income effects on spousal labor 47 5.1 Sex ratio: unmarried men 20 to 29, to unmarried women 18 to 29 94 5.2 Percent never married, women 25 to 29 94 5.3 Women's median age at marriage 94 5.4 Unmarried couples living together 95 5.5 Percent women employed, ages 25 to 34 95 5.6 Divorces per 1,000 married women, ages 25 to 34 95 8.1 Markets for spousal labor by women from groups A and B 144 9.1 A woman's indifference curves 165 xii Tables and Figures 9.2 Women's opportunities for income from spousal labor 166 9.3 Optimal match 167 9.4 Life-time productivity of wife and husband, and life-time profile in compensation for wife's spousal labor 180 10.1 Income effects on spousal labor 185 10.2 A Negative Income Tax program with positive tax reimbursement 211 13.1 Market for virtuous workers 261 Tables and Figures xiii Preface Marriage is an institution that plays a central role in most societies. As it affects decisions regarding labor supply, consumption, reproduction, and other important decisions, marriage receives considerable attention in academic circles. Much research has been done about marriage, principally by sociologists, psychologists, and anthropologists. While recognizing its importance, most economists have let marriage play a small role in their research. Economic theory ignores marriage almost completely. In their empirical studies, economists pay little attention to marriage, even where the evidence indicates that marital status is strongly related to the topic of research. If they include any reference to marriage, economists usually reduce marital status to the role of an exogenous control variable. So far, the economics of marriage, defined as the application of economic analysis to the study of marriage, has generated very limited interest. One of the reasons for this limited interest may lie in the lack of available books focusing on the economics of marriage. As of the time of this writing, only three books on the economics of marriage have been published. Gary Becker's (1981) Treatise on the Family, published in the United States, stands out in the rigor of its mathematical presentation. Ivy Papps' (1980) On Love and Money, published in England, focusses on a limited number of applications of the economic analysis of marriage. The most comprehensive and readable book published on this topic in the past is Bertrand Lemennicier's (1988) Le Marche du Mariage et de la Famille. If it has not generated much interest in the economics of marriage in the United States or the United Kingdom, it is probably because it has not been translated into English. My major goals in the present book are to show that economics can be useful and relevant to the study of many aspects of marriage, and to fill some of the vacuum existing in this area. Central to the book is the general theory of marriage presented in Part Two. The idea for that theory occurred to me during the beginning stages of my doctoral thesis in 1974-75. It was then that I first developed a market for xiv Preface xv spousal labor and called it a "market for wife-services" (Grossbard 1976). At that time I also started writing on the interrelation between labor markets and spousal labor markets, but I did not have the opportunity to develop that idea until 1980, when I spent a year as a fellow at Stanford's Center for Advanced Study in the Behavioral Sciences. In an attempt to create better communication between the disciplines engaged in research on marriage and thereby facilitate cross-fertilization, this book emphasizes materials that are most likely to interest social scientists. The book deals mostly with issues and data of contemporary relevance to two industrialized countries, namely the United States and Israel. Of the two chapters reporting data analysis from developing countries, the chapter analyzing cohabitation is very relevant to contemporary social policy in industrialized countries today, given the rapid increase in the incidence of cohabitation in the West. Furthermore, this book emphasizes themes that are of interest to mainstream economists and sociologists. One of the central ideas of the book-- the impact of sex ratios on many aspects of behavior including labor supply--is an idea I started writing about in 1978 and which has become very popular in recent years. Another theme emphasized in the book, compensating differentials in marriage, will hopefully appeal to researchers in both labor studies and family studies. Some of the themes covered in the book reflect my own research opportunities. I have researched polygamy in great part because Theodore W. Schultz and Gary Becker encouraged me to do so while I was a student at the University of Chicago. A summer job at Rand in 1976 offered the opportunity to work with William Butz studying Guatemalan data.
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