Download Marriage

Marriage Market:
S & D
• Uses Becker Model: uses
productivity as proxy for utility.
– How marital status choice is made;
– How gains of trade are divided between
husband and wife?
• Need basics (M=male; F=female):
– Output:
• For single person: ZM and ZF
• For married-couple HH: ZMF
– Share of Output:
• Amount of ZMF to husbnd = SM
• Amount of ZMF to wife: = SF
Further Details:
Marriage Market
• NOT assuming that SM = SF.
• Note: SM + SF = ZMF.
• Marriage “rule”:
– Marry if expect to be better off:
– Man: marry if SM ZM.
– Female: marry if SF  ZF.
• Implies that for married couple:
– SM + SF  ZM + ZF.
– So: ZMF  ZM + ZF:
– Gains to marriage for most
individuals.
Basics of S & D Model
• Price term: SF:
– What a woman must receive to be
willing to marry and what a man is
willing to pay to be married.
• Restate marriage “rule” and
resulting shape of S curve:
– Marry only if SF  ZF.
– SF ranges from very low to very high;
when SF low, very few women willing
to marry.
– When SF very high: all women willing
to marry; curve becomes vertical since
no more single women.
– Shows positive relationship between
price and quantity supplied.
• Law of Supply
Marriage Model
(continued)
• To complete model, need demand
curve (of men) FOR wives.
• Need SAME price:
– Know: When SF high, SM very low.I.,e.,
when pay a lot to wife via SF, portion
left over for husband via SM is small.
– So man prefers low SF (and so high
SM).
• Yields negative relationship
between man’s willingness to marry
and price of marriage (I.e., amount
of productivity within marriage that
must go to wife).
• Consistent with Law of Demand.
– See Figures 7 and 8.
Marriage Market
Equilibrium
• Horizontal axis: # men or women
willing to marry.
• Vertical axis: price (SF): what
woman gets; what man pays.
• Equilibrium:
– not determined by negotiations within
each single marriage;
– general terms set by market (like social
norms);
– interpret: “..this is what married life is
like for men and women.”
• NOT showing how pick specific
partner, rather, shows:
– general decisions regarding marriage.
– how men/women treated within
marriage.
More on Equilibrium
• Marriage market equilibrium:
– unique price SF* that sets S = D.
• Explain equilibrating process as
with any market:
– If price too low as at SFL:
• Qd  Qs: more men looking than women
willing to marry;
• shortage;
• so men bid up price.
– If price too high as at SFH : Qs  Qd.
• At equilibrium:
– See N*
– # unmarried men
– # unmarried women.
Effect of Changes
in S & D
• Three examples:
– 1) change in sex ratio
– 2) women’s improved L mkt
opportunities
– 3) Effect of birth control, etc.
• Change in sex ratio:
–
–
–
–
See Table 4;
Differences by age and race.
Also: differences by education.
Effect of  in sex ratio:
•  # women w/no # men
• Shift parallel part over to right
• See  slope (same %  in #women ; smaller
#  at low SF; larger #  at high SF).
• See Figure 9.
Other Changes in S & D
• Increase in women’s wages:
– Will  ZF (well-being while single).
– Shifts S upwards:
• each woman now willing to marry at higher
value of SF than before.
• see Figure 10;
• no change vertical point.
• More effective birth control:
–  ZF and  ZM
– See Figure 11:
• start with S2 and D2
• AIDS: start with S1 and D1