Gender Discrimination and Effciency in Marriage: the Bargaining Family under Scrutiny

This paper criticizes the view that discrimination limits the disadvantaged sex to undertaking housework and thus ensures that gains from specialization at the household level are not wasted. Our framework gives attention to causal links between labor market discrimination and the strategic behavior of women and men within families. We consider a repeated family bargaining model that links the topics of employment and households. A key aspect of the model is that marital bargaining power is determined endogenously: the amount of money a person earns - in comparison with a partner's income - establishes relative marital bargaining power. Gender discrimination can alter household behavior in surprising and sometimes unfortunate ways. We show that: (i) the effciency of household decisions is sometimes inversely related to the prevailing degree of gender discrimination in labor markets; (ii) discriminated against females have diffculty enforcing cooperative household outcomes since they may be extremely limited to credibly punish opportunistic behavior by their male partners; (iii) the likelihood that sharing rules such as "equal sharing" are maintained throughout a marriage relationship is highest when men and women face equal opportunities in labor markets. A key policy implication obtained from our analysis is that efforts to promote greater gender equality in labor markets can also contribute to increasing the likelihood of fully cooperative outcomes at the household level.

Should We Write Prenuptial Contracts?

When a marriage dissolves, a couple usually divides all marital assets according to the division rule imposed upon them by the state. The present paper uses incomplete contract theory to study the interplay between the state�s division rule and a married couple�s investment in relationship-specific assets. The inability of spouses to contract upon their specific investments, leads them to choose less than the first-best level of investment. To the extent that this underinvestment poses a threat to the stability of marriage, this creates a role for the use of ex ante separation agreements that stipulate the allocation of marital assets upon divorce. We examine the type of contractual structure that the partners should optimally adopt at the outset of marriage. The implications of our results are then applied in the context of various asset division rules discussed by policy makers.

O Brother, Where Art Thou?: The Effects of Having a Sibling on Geographic Mobility and Labor Market Outcomes

In most industrialized countries, more people than ever are having to cope with the burden of caring for elderly parents. This paper formulates a model to explain how parental care responsibilities and family structure interact in affecting children's mobility characteristics. A key insight we obtain is that the mobility of young adults crucially depends on the presence of a sibling. Our explanation is mainly, but not ex-clusively, based on a sibling power effect. Siblings compete in location and employment decisions so as to direct parental care decisions at later stages towards their preferred outcome. Only children are not exposed to this kind of competition. This causes an equilibrium in which siblings not only exhibit higher mobility than only children, but also have better labor market outcomes. Using data from the German Socio-Economic Panel Study (SOEP) and from the American National Survey of Families and House- holds (NSFH), we find strong evidence that confirms these patterns. The implications of our results are then discussed in the context of current population trends in Europe and the United States.Geographic Mobility, Intergenerational Relationships, Care of the Elderly, Family Bargaining.

Does Democracy Foster Trust?

The level of trust inherent in a society is important for a wide range of microeconomic and macroeconomic outcomes. This paper investigates how individuals' attitudes toward social and institutional trust are shaped by the political regime in which they live. The German reunification is a unique natural experiment that allows us to conduct such a study. Using data from the German General Social Survey (ALLBUS) and from the German Socio-Economic Panel Study (SOEP), we obtain two sets of results. On one side, we find that, shortly after reunification, East Germans displayed a significantly less trusting attitude than West Germans. This suggests a negative effect of communism in East Germany versus democracy in West Germany on social and institutional trust. However, the experience of democracy by East Germans since reunification did not serve to increase levels of social trust significantly. In fact, we cannot reject the hypothesis that East Germans, after more than a decade of democracy, have the same levels of social distrust as shortly after the collapse of communism. In trying to understand the underlying causes, we show that the persistence of social distrust in the East can be explained by negative economic outcomes that many East Germans experienced in the post-reunification period. Our main conclusion is that democracy can foster trust in post-communist societies only when citizens' economic outcomes are right.Social Trust, Institutional Trust, Political Regimes.

From Politics to the Family: How Sex-Role Attitudes Keep on Diverging in Reunified Germany

What is the role of politics in shaping attitudes about appropriate roles for women in the family and the compatibility of work and motherhood? In this paper we argue that the German separation and later reunification produced a natural experiment to address this question. During the divided years, East German institutions encouraged high levels of full-time employment for women, including mothers. The West German system by contrast deterred women in general, and mothers in particular, from full-time employment. After reunification, family-related policies largely converged in the two Germanies. Against this background, we empirically investigate gender-role attitudes in reunified Germany. Our results show that East Germans are significantly more likely to hold egalitarian or nontraditional sex-role attitudes than West Germans. Despite a scenario of partial policy convergence, we also find evidence that the gap between East and West German gender role attitudes more than doubled in the years after reunification. We suggest that one explanation for this divergence could be found in the notion of social identity.political regimes, gender role attitudes

Family Location and Caregiving Patterns from an International Perspective

This paper conducts a cross-national econometric analysis of intra-family location and caregiving patterns. First, we assess, from an international perspective, the relationship between family structure and the geographic proximity between adult children and their parents. We then examine whether differences in family structure affect the amount of informal care adult children provide to their elderly parents. Lastly, we look for cross-country differences in family location and caregiving patterns, and interpret observed differences in terms of heterogenous institutional solutions to the long-term care problem. Our results not only provide a new empirical perspective on the geography of the family, but also give interesting insights into how family-related and institutional factors shape patterns of time transfers from adult children to elderly parents.geography of the family, child-to-parent time transfers

On the Optimality of Joint Taxation for Non-Cooperative Couples

We present a non-cooperative model of a family’s time allocation between work and a home-produced public good, and examine whether the income tax should apply to couples or individuals. While tax-induced labor supply distortions lead to overprovision of the public good, spouses’ failure to internalize the collective effect of their choices points towards underprovision. A large parameter range exists for which a move from individual to joint taxation improves the welfare of both spouses. The source of Pareto-improvement consists in moving the level of the public good closer to its first-best, while an adjustment of intra-family transfers compensates the secondary earner for the increased tax load.individual taxation, joint taxation, household production, public goods

Family Location and Caregiving Patterns from an International Perspective

This paper conducts a cross-national econometric analysis of intra-family location and caregiving patterns. First, we assess, from an international perspective, the relationship between family structure and the geographic proximity between adult children and their parents. We then examine whether differences in family structure affect the amount of informal care adult children provide to their elderly parents. Lastly, we look for cross-country differences in family location and caregiving patterns, and interpret observed differences in terms of heterogenous institutional solutions to the long-term care problem. Our results not only provide a new empirical perspective on the geography of the family, but also give interesting insights into how family-related and institutional factors shape patterns of time transfers from adult children to elderly parents.geography of the family, child-to-parent time transfers

Domestic Abuse: Instrumental Violence and Economics Incentives

A large fraction of domestically abused women report that their partners interfere with their participation in education and employment. As of yet, mainstream economics has not dealt in any systematic way with this phenomenon and its implications for welfare policy. This paper puts forward a theoretical framework that rationalizes why men may use violence “instrumentally” to prevent their partners from entering employment or from increasing hours of work. The model predicts a non-monotonic relationship between the gender wage gap and domestic violence. We explore the implication of this result in the context of various welfare policies. There are unlikely to be any magic bullets or one-size-fit-all solutions when it comes to reducing the incidence of domestic violence. Instead, specific measures and incentives may have to be targeted at different types of households.instrumental partner-violence, non-cooperative family decision-making, welfare policy

Does Democracy Foster Trust? Evidence from the German Reunification

The level of trust inherent in a society is important for a wide range of microeconomic and macroeconomic outcomes. This paper investigates how individuals' attitudes toward social and institutional trust are shaped by the political regime in which they live. The German reunification is a unique natural experiment that allows us to conduct such a study. Using data from the German General Social Survey (ALLBUS) and from the German Socio-Economic Panel Study (SOEP), we obtain two sets of results. On one side, we find that, shortly after reunification, East Germans displayed a significantly less trusting attitude than West Germans. This suggests a negative effect of communism in East Germany versus democracy in West Germany on social and institutional trust. However, the experience of democracy by East Germans since reunification did not serve to increase levels of social trust significantly. In fact, we cannot reject the hypothesis that East Germans, after more than a decade of democracy, have the same levels of social distrust as shortly after the collapse of communism. In trying to understand the underlying causes, we show that the persistence of social distrust in the East can be explained by negative economic outcomes that many East Germans experienced in the post-reunification period. Our main conclusion is that democracy can foster trust in post-communist societies only when citizens' economic outcomes are right.