Seminar in macroeconomics - Cohabitation, Child Development and College Costs
Time
Monday, 21. October 2024
12:00 - 13:15
Location
F428
Organizer
Speaker:
Anne Hannusch (University of Mannheim)
Cohabitation, Child Development and College Costs
(joint with Efi Adamopoulou, Karen Kopecky, and Tim Obermeier)
Abstract: We examine why U.S. college-educated couples with children marry rather than co-habit and the implications for children’s development. Marriage offers lower separation risk and equal asset division, benefiting the lower-earning spouse. This arrangement encourages married women to invest more time and money in children, thereby increasing their chances of college completion. Using an OLG model with marriage, cohabitation, wealth accumulation, and educational investments, we find that the higher insurance value of marriage for college-educated couples increases marriage rates, thus elevating college completion rates for their children. Insurance through marriage is particularly important when investing in children is very costly.