Education, Matching and the Allocative Value of Romance

43 Pages Posted: 8 Aug 2005

See all articles by Alison L. Booth

Alison L. Booth

Australian National University (ANU) - Research School of Social Sciences (RSSS); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Melvyn G. Coles

University of Essex - Department of Economics; Autonomous University of Barcelona; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2005

Abstract

Societies are characterized by customs governing the allocation of non-market goods such as marital partnerships. We explore how such customs affect the educational investment decisions of young singles and the subsequent joint labor supply decisions of partnered couples. We consider two separate matching paradigms for agents with heterogeneous abilities - one where partners marry for money and the other where partners marry for romantic reasons orthogonal to productivity or debt. These generate different investment incentives and, therefore, have a real impact on the market economy. While marrying for money generates greater investment efficiency, romantic matching generates greater allocative efficiency, since more high ability individuals participate in the labor market. The analysis offers the possibility of explaining cross-country differences in educational investments and labor force participation based on matching regimes.

Keywords: Education, participation, matching, marriage, cohabitation

JEL Classification: I21, J12, J16, J41

Suggested Citation

Booth, Alison L. and Coles, Melvyn G., Education, Matching and the Allocative Value of Romance (June 2005). CEPR Discussion Paper No. 5099, Available at SSRN: https://ssrn.com/abstract=779164

Alison L. Booth (Contact Author)

Australian National University (ANU) - Research School of Social Sciences (RSSS) ( email )

Canberra, Australian Capital Territory 0200
Australia
+61 2 6125 3285 (Phone)
+61 2 6125 0182 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Melvyn G. Coles

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 1206 873333 (Phone)
+44 1206 872724 (Fax)

Autonomous University of Barcelona

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
SPAIN

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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