The Effect of Bargaining Positions in Marriage on Human Capital Accumulation

Sean C. Lewis-Faupel, University of Wisconsin-Madison

When bargaining occurs within a marriage and bargaining positions are determined by unmarried income potential, agents should accumulate higher levels of human capital than they would given market returns only. Past work on life-cycle human capital decisions either does not model bargaining in the marriage or only describes theoretical outcomes of bargaining without making empirical measurements. I construct a multi-period model of education, labor market, and marriage decisions in which agents account for the bargaining environment of marriage. After estimating parameters using data from the NLSY79, I measure the additional education and labor hours induced by bargaining in the marriage.