Study: “Spousal Resource Control, Fertility, and Intra-Household Conflict”
PI: Persson, Petra
Affiliation: Columbia University
Funding Partner: IIE
Geographic Location: Cross-country analysis
This research addresses the impact of economic enforcement of the wife within the household related to the use of contraception; fertility; and incidents of sexual, emotional, and physical abuse. When social insurance eligibility depends on marital status, this is a government intervention into the marriage market. The research shows show that such intervention influences three behavioral margins in the marriage market, and tests the theory exploiting a Swedish reform of survivors insurance–an annuity paid to widows, but not divorcees, upon the husband’s death. First, the research analyzes bunching in the distribution of marriages and shows that, by affecting the wedge between marriage and cohabitation, survivors insurance alters the composition of married couples up to 45 years before the annuity’s expected payout. This distortion is larger in couples with higher ex-post male mortality, holding constant the policy’s value at realization and all demographics observed, suggesting “adverse selection” into government-provided insurance. Second, the research uses a regression discontinuity design to show that removal of survivors insurance from existing marriage contracts caused divorces and, in surviving unions, a renegotiation of marital surplus. Third, because survivors insurance subsidized couples with highly unequal earnings (capacities), its elimination raised the long-run assortativeness of matching. Such marriage market responses to social insurance design have important implications for when it is optimal to separate social insurance from marriage in modern societies.
Lee, Samuel & Persson, Petra. (2012). Human Trafficking and Regulating Prostitution (IFN Working Paper No. 996; NYU Stern School of Business EC-12-07; NYU Law and Economics Research Paper No. 12-08).DOI: 10.2139/ssrn.2057299.
Persson, Petra. (2014). Social Insurance and the Marriage Market. Insitute for the Evaluation of Labour Market and Education policy. 2015:6