 
|
|
Research Area: |
|
Markets and Politics |
 |
|
 |
|
|
|
|
|
|
Abstracts |
|
|
|
> Browse by year: |
2008
I
2007
I
2006
I
2005
I
2004
I 2003
I 2002
I 2001
I 2000
I 1999
I 1998
I 1997
I 1996
I 1995
I 1994 |
|
|
|
|
|
|
Kai A. Konrad and Kjell Erik
Lommerud
Love and Taxes – and Matching
Institutions
|
|
|
We study a setting with search frictions in the marriage market and
with incomplete contracting inside the family. Everyone prefers a
partner that has high income and is a perfect emotional match, but
compromises must often be struck. A high income earner may abstain
from marrying a low-income earner even though they would be a
perfect match emotionally, because the high-income earner may
dislike the implicit income redistribution implied by the marriage.
Redistributive income taxation may ease this problem. Income
matching institutions that secure that people largely from the same
income groups meet each other can substitute for redistribution, so
that optimal redistribution is reduced. We also introduce a divorce
option. Redistributive taxation is shown both to further and
stabilize marriage. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
 |
|
