Essays on family and labor economics.

Abstract

In the first part of the thesis, I analyze the impact of change in divorce law on the the divorce rate in the early Seventies in the U.S. The new laws introduced unilateral divorce in most of the states, and changes in property division, alimony and child support transfers, and child custody assignments in every state. Empirical literature has focused on the switch from consensual to unilateral divorce and found that this change cannot fully account for the increase in the divorce rate. I show that changes in divorce settlements provide economic incentives for both spouses to agree on divorcing. I solve and calibrate a model where agents differ by gender, and wages, and make marital status, investment, and labor supply decisions. Under the new law, divorced men gain from a favorable division of property, while women gain from an increase in the probability of receiving transfers from the ex spouse. Results show that changes in divorce settlements account for a substantial amount of the increase in the divorce rate. In the second part of the thesis, we investigate the transition process of the fertility rate in the U.S., and estimate the effect of diffusion on geographic variations in fertility. We provide several measures of local and global spatial correlation to establish the existence of a significant geographic pattern in the data. Moreover, we use a spatial-diffusion model to assess the effect of diffusion in shaping fertility variation across about 400 state economic areas (SEA) from 1870 to 1930. The variation in fertility levels and the fertility potential for each SEA are measured. Fertility potential is a spatial-effects variable that summarizes each SEA's geographic proximity to the influence of other high or low fertility areas. The findings support a diffusionist model of fertility. Even when controlling for demographics and economic variables, fertility levels remain sensitive to fertility level of other SEAs', especially proximate ones. That is, spatial similarity in fertility can result from the spread of fertility related knowledge, or from the diffusion of changing norms related to family size within marriage.