Pierre André Chiappori (Columbia) "Family Economics" - Cemmap

10. An equilibrium model of marriage, fertility and divorce 457
FIGURE 10.3. Equilibrium Divorce Rates
Table 10.1: Example with Multiple Equilibria
p =0.0 p =0.25 p =0.5
Critical value for marriage, θm
Critical value for children, θc
Percent married
Percent with children
Percent divorced with children
Percent divorced without children
Percent single
Lifetime utility
Parameter values:
Income, Y =1
Range for the match quality, θ ∈ [− 1
6
, 1
6 ]
Size of shock to match quality, a = ± 11
12
Utility of children in intact family, q ∗ =1
Utility of children following divorce, q 0 =0
−1.31
−.25
100
100
0
−
0
4.083
Cost of raising children, c = 11
12
Probability of remarriage, γ =1
Expected quality of match conditioned on remarriage,
β = E(θ/θ ≥−Y )=0
−1.22
.00
100
50
0
50
25
4.094
−1.14
.25
100
0
0
50
50
4.208