John Knowles: Working Papers

Title: Marital Instability and the Distribution of Wealth

Authors: Nezih Guner and John Knowles

Working Paper:

First Version: January, 2000

This Version: April, 2003

Funding: This research was supported by the National Institutes of Health - National Institute on Aging, Grant number AG12836.

Abstract:

The levels of wealth differ significantly among people who are approaching their retirement both by current marital status as well as by marital histories. We develop an equilibrium model of marriage and divorce and household savings, in which the interplay between endogenous formation and dissolution of families and savings decisions plays a key role. We show that a calibrated version of the model can reproduce observed patterns of wealth inequality by marital status and marital history, and highlight the role of endogenous marriage formation in wealth accumulation.

Journal of Economic Literature Classification Numbers: