A spouse and a house are all we need? Housingdemand, labor supply and divorce over the lifecycle

Séminaire organisé par le CAPE et le CEREC

Discussant : Bram de Rock (ULB - KULeuven)

Room : P61

Abstract : To analyze the impact of changes in the value of marriage on household decisions, we present a limited commitment framework of household behavior in which decisions are made regarding labor supply, divorce and housing demand over the lifecycle. We identify and estimate our structural model using exogenous variation in female labor supply and divorce rates due to the White v. White case in England. We conclude that limited commitment dampens the added worker e ect, while the changes in the value of marriage due to a housing price shock have an asymmetric impact on individual welfare both across gender and marital state. We also show that tightening the credit market in different ways can lead to opposite behavior in terms of household savings and female labor supply.