Graduate School of Economics and Osaka School of International Public Policy (OSIPP) Osaka University
Abstract
In this paper, we present a model in which agents choose voice, exit, or stay options when their marital condition becomes bad. The voice option can be interpreted as a spouses e¤ort or investment in the household to resolve his/her dissatisfaction and improve the marital condition. If a spouse hopes to divorce, he/she chooses the exitoption. If a spouse does not hope to express his/her opinion and divorce, he/she chooses the stayoption. We focus on the role of exitand voicein a marriage and investigate the e¤ects of a divorce law that is based on fault or no-fault on divorce rates. Our study shows that divorce rates tend to be too high under a unilateral divorce law in the non-transferable utility case. On the other hand, mutual-consent divorce law generates multiple equilibria, and divorce rates are then ine ¢ cient even in the transferable utility case. In this multiple equilibrium case
