Free to Leave? A Welfare Analysis of Divorce Regimes

2017 ◽  
Vol 9 (3) ◽  
pp. 72-115 ◽  
Author(s):  
Raquel Fernández ◽  
Joyce Cheng Wong
Keyword(s):  
United States ◽  
Life Cycle ◽  
Marital Status ◽  
Welfare Analysis ◽  
The United States ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Ex Ante ◽  
Unilateral Divorce ◽  
Consumption Saving

During the 1970s, the United States switched from mutual consent to a unilateral divorce regime. Who benefited/lost from this change? We develop a dynamic life cycle model in which agents make consumption, saving, work, and marital-status decisions under a given divorce regime. Calibrating the model to match key moments for the 1940 cohort and conditioning solely on gender, our ex ante welfare analysis finds that women fare better under mutual consent whereas men prefer a unilateral system. Conditioning as well on initial productivity (expected income), we find that the top three quintiles of men and the top two quintiles of women prefer unilateral divorce. (JEL D91, J12, J16, K36)

scholarly journals Accounting for the Rise in Consumer Bankruptcies

2010 ◽  
Vol 2 (2) ◽  
pp. 165-193 ◽  
Author(s):  
Igor Livshits ◽  
James MacGee ◽  
Michèle Tertilt
Keyword(s):  
United States ◽  
Life Cycle ◽  
Credit Market ◽  
The United States ◽  
Income Shocks ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Heterogeneous Agent ◽  
Working Age ◽  
The Cost

Personal bankruptcies in the United States have increased dramatically, rising from 1.4 per thousand working age adults in 1970 to 8.5 in 2002. We use a heterogeneous agent life-cycle model with competitive lenders to evaluate several commonly offered explanations. We find that increased uncertainty (income shocks, expense uncertainty) cannot account quantitatively for the rise in bankruptcies. Instead, the rise in filings appears mainly to reflect changes in the credit market environment: a decrease in the transaction cost of lending and in the cost of bankruptcy. We also argue that the abolition of usury laws and other legal changes were unimportant. (JEL D14, E44, G21, G28)

ACCOUNTING FOR LIFE-CYCLE WEALTH ACCUMULATION: THE ROLE OF HOUSING INSTITUTION

2011 ◽  
Vol 16 (4) ◽  
pp. 493-517 ◽  
Author(s):  
Sang-Wook (Stanley) Cho
Keyword(s):  
Life Cycle ◽  
The United States ◽  
Mortgage Market ◽  
Wealth Accumulation ◽  
Labor Income ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Policy Experiments ◽  
Cross Country

This paper constructs a quantitative general equilibrium life-cycle model with uninsurable labor income to account for the differences in wealth accumulation and homeownership between Korea and the United States. The model incorporates different structures in the housing market in the two countries, namely, the mortgage market and the rental arrangements. The results from the calibrated model quantitatively explain some empirical findings in the aggregate and life-cycle profiles of wealth and homeownership. Quantitative policy experiments show that the mortgage market alone can account for more than 40% of the differences in the aggregate homeownership ratios. When coupled with the rental arrangements, both institutions can account for approximately 52% of the differences in the cross-country homeownership ratios.

scholarly journals Is the selfish life-cycle model more applicable in Japan and, if so, why? A literature survey

2020 ◽  
Author(s):  
Charles Yuji Horioka
Keyword(s):  
Life Cycle ◽  
The United States ◽  
Economic Modeling ◽  
Government Policies ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Family Ties ◽  
Household Saving ◽  
Almost All ◽  
Consistent Support

Abstract The selfish life-cycle model or hypothesis is, together with the dynasty or altruism model, the most widely used theoretical model of household behavior in economics, but does this model apply in the case of a country like Japan, which is said to have closer family ties than other countries? In this paper, we first provide a brief exposition of the simplest version of the selfish life-cycle model and then survey the literature on household saving and bequest behavior in Japan in order to answer this question. The paper finds that almost all of the available evidence suggests that the selfish life-cycle model applies to at least some extent in all countries but that there is more consistent support for this model in Japan than in the United States and other countries. It then explores possible explanations for why the life-cycle model is more consistently supported in Japan than in other countries, attributing this finding to government policies, institutional factors, economic factors, demographic factors, and cultural factors. Finally, it shows that the findings of the paper have many important implications for economic modeling and for government tax and expenditure policies.

scholarly journals It Sucks to Be Single! Marital Status and Redistribution of Social Security*

2020 ◽  
Author(s):  
Max Groneck ◽  
Johanna Wallenius
Keyword(s):  
Life Cycle ◽  
Life Expectancy ◽  
Social Security ◽  
Marital Status ◽  
Labour Supply ◽  
Life Cycle Model ◽  
Depressing Effect ◽  
Cycle Model ◽  
Marriage Stability ◽  
The Us

Abstract In this article, we study the labour supply effects and the redistributional consequences of the US social security system. We focus particularly on auxiliary benefits, where eligibility is linked to marital status. To this end, we develop a dynamic, structural life cycle model of singles and couples, featuring uncertain marital status and survival. We account for the socio-economic gradients to both marriage stability and life expectancy. We find that auxiliary benefits have a large depressing effect on married women’s employment. Moreover, we show that a revenue neutral minimum benefit scheme would moderately reduce inequality relative to the current US system.

Sign in / Sign up

Export Citation Format

Share Document