Sources
Notes
1 Kreider, for the U.S. Census Bureau. See footnote 17 in the report for the most recent data.2 See Figure 1, page 3.
3 Assuming that a marriage in which there is adultery, abuse, and other such behaviors is associated with a low utility of marriage.
4 For a brief history of divorce law, see Brinig(1994), Gedees(2002), and Mnookin.
5 This allows one party to unilaterally choose divorce, the other spouse's opinion being irrelevant.
6 The upward shift of the supply curve that results from the change from fault to no-fault divorce initially causes the divorce rate to fall. However, this shift in divorce law actually increases the divorce rate for other reasons, as shall be shown later in this paper.
7 For a complete discussion of utility comparison in marriage and divorce, see Becker (1991), Posner (1998), and Zelder(1993).
8 Joint gains from divorce means that the gains of getting divorced for the spouse who wishes to get divorced exceed the gains of staying married for the spouse that wishes to remain married.
9 See Zelder(1993) for a discussion of the application of the Coase Theorem to divorce law.
10 This compensation can come in the form of transfers of current wealth (dividing up marriage assets) or transfers of future wealth (such as alimony and childcare payments).
11 When property rights are assigned to the party that wishes to stay married, non-pecuniary transfers of surplus are not possible, or at least are much less likely. What non-pecuniary offers can a spouse make after a divorce? When a couple stays married, a spouse can offer non-pecuniary transfers of surplus such as increased moral support, love and affection, and so on-transfers of surplus impossible during or after a divorce.
12 See Zelder(1993) for a discussion of children as a public good in marriage and the effects this has.
13 Or any other public good. Public goods other than children are not examined in this paper or in any of the source articles.
14 Zelder empirically shows that when the ratio of investment in children to the investment in the couple in marriage is high, no-fault divorce laws lead to increased divorce rates.
15 See Figure 2, page 5.
16 At a level utility of marriage that previously would not have resulted in divorce, under no-fault divorce with non-transferable utility surplus, the marriage may end in divorce. See Brinig(1994) and Zelder(1993) for discussion of the increased likelihood of divorce under no-fault divorce laws.
17 See Mnookin.
18 Having to pay future wealth to a spouse also acts as a tax on future earnings, having the same disincentive effects that a tax has. See Mnookin.
19 See Brinig(1994).
20 See Figure 3, page 8.
21 Curve is concave up instead of concave down as is the usual depiction of diminishing returns where production is shown on y-axis instead of on x-axis as is the case here.
22 Opportunistic behavior is behavior such as adultery, abuse, gambling, drinking, and many others. See Brinig(1994).
23 Steepness refers to a curve plotted with investment on the y-axis and human capital on the x-axis.
24 For example, this explains why most parents are willing pay taxes to send their children to public school (they might even move to a district with better public schools despite the associated higher property taxes) but most will not pay the additional amount to send their children to private school.
25 Both the demand and supply curves in this model are upward sloping. This could mean that they do no intersect. However, the supply curve (the production function of human capital) is concave up and the demand curve (the investment in human capital made by parents) is concave down, guaranteeing an intersection and thus equilibrium value of human capital and investment.
26 Traditionally this would be the homemaking woman who has low market human capital but high domestic human capital.
27 See Geddes(2002).
28 This could come in the form of increased childcare payments or increased parental involvment.
29 Empirical studies on how this could be implemented would need to be conducted to determine the feasibility of this option. Determining spousal involvement in investment in children would be difficult to determine.
This was an entry for The 2004 Moffatt Prize in Economic Writing. See the contest rules for more information.
If you'd like to leave comments about this entry, use the contest feedback form. Make sure to indicate that you are commenting on Jonathan Lhost's "The Market For Divorce".
