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: Z M and Z F For married-couple HH: Z MF –Share of Output: Amount of Z MF to husbnd = S M Amount of Z MF to wife: = S F

Further Details: Marriage Market NOT assuming that S M = S F. Note: S M + S F = Z MF. Marriage “rule”: –Marry if expect to be better off: –Man: marry if S M  Z M. –Female: marry if S F  Z F. Implies that for married couple: –S M + S F  Z M + Z F. –So: Z MF  Z M + Z F : –Gains to marriage for most individuals.

Basics of S & D Model Price term: S F : –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 S F  Z F. –S F ranges from very low to very high; when S F low, very few women willing to marry. –When S F 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 S F high, S M very low.I.,e., when pay a lot to wife via S F, portion left over for husband via S M is small. –So man prefers low S F (and so high S M ). 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 (S F ): 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 S F * that sets S = D. Explain equilibrating process as with any market: –If price too low as at S FL : Qd  Qs: more men looking than women willing to marry; shortage; so men bid up price. –If price too high as at S FH : 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 S F ; larger #  at high S F ). See Figure 9.

Other Changes in S & D Increase in women’s wages: –Will  Z F (well-being while single). –Shifts S upwards: each woman now willing to marry at higher value of S F than before. see Figure 10; no change vertical point. More effective birth control: –  Z F and  Z M –See Figure 11: start with S 2 and D 2 AIDS: start with S 1 and D 1