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

498 11. Marriage, Divorce, Children
Table 11.1: Impact of Change in Parameter on the Equilibrium
Divorce (Remarriage) Rate and Life Time Utilities of Family
Members
Part 1: Benchmark Parameters
Husband’s wage wf =1
Wife’s wage wm = .5
Mother’s productivity in child care γ =1.75
Father’s productivity in child care β =0
Child’s marginal utility from the adult good α = .25
Distribution of shocks θ˜U[−d, d], d=2
Utility from child expenditures 1
g(c) =2.25 ∗ (1 − (1+c) 2.25 Child expenditure levels
)
c∗ =0.5378, ĉ =0.1203, g(c∗ )=1.4
Proximity factor of father’s utility from child δ = .75
Discount factor ∆ = .625
Fixed cost of separation without a child b0 =0
Fixed cost of separation with a child
Father’s second period utility
b1 = .35
γ + g(c∗ )+(1+α)(wf − c∗ Mother’s second period utility
)=3.72
γ + g(c∗ )+(1+α)(wf − c∗ Child’s second period utility
)=3.72
γ + g(c∗ )+α(wf − c∗ )=3.26