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Marriage and employment participation with wage bargaining in search equilibrium

Lookup NU author(s): Dr Roberto Bonilla Trejos



This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).


We model a marriage market where singles consider the prospects of employment and income of their potential spouses, and married couples make joint decisions on home production and labor participation. A worker’s bargaining position for wages reflects their own productivity, and also the employment status and conditions of their spouse. This double interaction between the marriage and labor markets is affected by search frictions in both. We find that couples with different combinations of productivities have different strategies regarding labor participation. When the search for mates is easy, people marry others with very similar productivity, and the behaviour of couples in the labor market is symmetric. When finding mates is hard, people could marry others very different from themselves, and if so their labor search strategy is going to be asymmetric. Married workers get better job offers when their spouses are employed, and in some equilibria a person may search for transitory jobs with the sole purpose of raising the long-term wages of their spouse. Firms may respond by offering some very productive individuals wages that secure that their spouses stay at home. Whether they follow that strategy or not may be a matter of multiple equilibria, depending on parameter values. Keywords: Marriage, search, home production Normal 0 false false false EN-GB X-NONE X-NONE

Publication metadata

Author(s): Bonilla R, Trejos A

Publication type: Article

Publication status: Published

Journal: Scottish Journal of Political Economy

Year: 2021

Volume: 68

Issue: 4

Pages: 517-533

Print publication date: 01/09/2021

Online publication date: 11/06/2021

Acceptance date: 05/05/2021

Date deposited: 20/07/2017

ISSN (print): 0036-9292

ISSN (electronic): 1467-9485

Publisher: Wiley-Blackwell Publishing Ltd.


DOI: 10.1111/sjpe.12289


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