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

464 11. Marriage, Divorce, Children
remarries, then child quality is influenced by the foster parent who may
care less about the child than his natural parents.
11.2.2 The legal framework
We consider a modern society in which individuals can marry or divorce
at will. However, the partners can sign binding contracts, enforced by law,
that specify the custody arrangement and child support payments following
divorce or remarriage. Such contracts may be signed at the time of
divorce or at the time of marriage. An interim contract signed at the time
ofdivorcetakesthepresenceofchildrenandtheseparationasgiven,and
it’s main objective is to influence the expenditures on children under the
different household structures that may arise if each parent remarries or
remains single. An ex-ante contract, signed at the time of marriage, aims
to influence the fertility and separation decisions as well. We discuss here
simple and familiar contracts in which the mother obtains custody and the
father commits, at the time of divorce, to pay the mother a fixed amount
that is not contingent on whether one or both of the parents remarry. Such
binding contracts are in fact enforced by law.
Except for the enforcement of arrangement that the partners may reach,
the law may also intervene by setting standards within which the partners
can operate. Custody is most often given to the mother on the ground that
she can take better care of the child, while the father obtains visitation
rights. Unless stated otherwise, we shall assume that, following divorce the
motheristhesolecustodian. 6 Often, custody assignment is associated with
some amount of child support that is mandated by law. The guiding principle
is that the custody assignment and the mandated payments should
minimize the harm to the child. Such legal constraints may affect the agreements
that partners would reach when bargaining in the "shadow of the
Law" (see Mnookin and Kornhauser, 1977).
11.2.3 The meeting’s technology
As in chapter 10, we assume that, each period, a person meets a random
draw from the population of the opposite sex in the same age group. If
this person is already married then such a meeting is ”wasted” and no new
marriage is formed. This feature creates "increasing returns" in meetings
(see Diamond and Maskin, 1979), whereby it is more likely to meet a single
6 See Cancian and Meyer (1998). However, the share of joint physical custody has
increased over time. Halla (2009) examines the impact of state differences in this trend
and concludes that the option of joint custody has raised the incentives of men to marry,
with little impact on divorce.