IFS Working Paper (W16/09)

The marriage market, labour supply and education choice

Date: 18 July 2016
Authors:
Publisher: Institute for Fiscal Studies
ISSN: 1742-0415
DOI: 10.1920/wp.ifs.2016.1609

We develop an equilibrium lifecycle model of education, marriage and labor supply and consumption in a transferable utility context. Individuals start by choosing their investments in education anticipating returns in the marriage market and the labor market. They then match based on the economic value of marriage and on preferences. Equilibrium in the marriage market determines intrahousehold allocation of resources. Following marriage households (married or single) save, supply labor and consume private and public commodities under uncertainty. Marriage thus has the dual role of providing public goods and offering risk sharing. The model is estimated using the British HPS.