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Abstract:
We present a framework for analysing intertemporal labour supply and household formation and dissolution decisions in an equilibrium limited-commitment collective framework that allows for marriage both within and across birth cohorts. Using Panel Study of Income Dynamics and American Community Survey data, we apply our equilibrium limited-commitment framework to empirically implement a model with labour market earnings risk, human capital accumulation, home production activities, fertility, and both within- and across-cohort marital matching. We use the model to assess the economic determinants of the age structure of marriages, and the differences in household specialisation patterns within age-similar and age-dissimilar marriages.
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