Essays on intra-household distribution

Abstract

In the first chapter of this thesis, I develop a model that combines intrahousehold bargaining with competition on the marriage market - once married, spouses bargain over the allocation of total household income. They have the option of divorce and subsequent remarriage; the value of this outside option is determined endogenously on the marriage market. I use this model to analyse the educational choice. When more women than men obtain a university degree, men without degrees benefit; university educated men, however, are not able to translate this change on the marriage market into a significantly larger share of household income. Hence, men's incentive to invest in education decreases if women's educational attainment increases. Even without assuming any heterogeneity in tastes between men and women, equilibria arise in which men and women decide to become educated at different rates. The second chapter shows empirically, that a woman's propensity to separate from her partner depends positively on male wage inequality on her local marriage market - the more heterogeneous potential future mates are in terms of earnings power, the more likely a woman is to end her relationship. This effect is strongest for couples, where one has a college education but the other one does not. The effect is robust to the inclusion of a variety of controls on the individual level, as well as state and time fixed effects and state specific time trends. The third chapter (co-authored with Julio Robledo) develops a two period family decision making model in which spouse bargain over the allocation of individual time and consumption. If inter-temporally binding contracts are not feasible, household time allocation might be inefficient. We compare two threat point specifications, and show that the threat point specification can influence spouses time allocation, not only the distribution of private consumption.