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Economics behind the law: why number of divorce cases grows when families become wealthier?

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  • Shuntian Yao
  • Euston Quah

Abstract

In this paper we study the effects of increasing family wealth on the number of divorce cases in a society. We assume that, when one party of a married couple seeks for divorce, the physical family wealth is equally divided between the homemaker and the breadwinner according to the Law. Through some simple mathematical analysis we discover that the number of divorce cases will increase when the amounts of family wealth increase. Our theoretical result is well-justified by the observation from the Chinese society after the Reforms. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • Shuntian Yao & Euston Quah, 2013. "Economics behind the law: why number of divorce cases grows when families become wealthier?," European Journal of Law and Economics, Springer, vol. 35(1), pages 137-143, February.
    • Handle: RePEc:kap:ejlwec:v:35:y:2013:i:1:p:137-143
    DOI: 10.1007/s10657-011-9297-9
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    1. Siemens, Ferdinand von, 2005. "Bargaining under Incomplete Information, Fairness, and the Hold-Up Problem," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 57, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. Lundberg, Shelly & Pollak, Robert A, 1994. "Noncooperative Bargaining Models of Marriage," American Economic Review, American Economic Association, vol. 84(2), pages 132-137, May.
    3. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
    4. Gray, Jeffrey S, 1998. "Divorce-Law Changes, Household Bargaining, and Married Women's Labor Supply," American Economic Review, American Economic Association, vol. 88(3), pages 628-642, June.
    5. Marjorie B. McElroy, 1990. "The Empirical Content of Nash-Bargained Household Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 559-583.
    6. Siemens, Ferdinand von, 2005. "Bargaining under Incomplete Information, Fairness, and the Hold-Up Problem," Discussion Papers in Economics 518, University of Munich, Department of Economics.
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    More about this item

    Keywords

    Law of 50–50 division rule; Private utility; Social welfare; Unstable families; D19; K19;
    All these keywords.

    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • K19 - Law and Economics - - Basic Areas of Law - - - Other

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