ABSTRACT
Economists have long recognized that the nature of the household plays a role in determining the supply of factors of production and the demand for goods and services. However, it was not until the "new home economics" developed by Mincer (1962), Becker (1965), and Lancaster (1966) that household structure was given a significant role in economic theory. Today labor economists regularly write about the value of married women's time, 1 and marital status enters economic analyses of consumption. 2 However, in most models used in labor economics no allowance is made for potential changes in the character of the household: single persons do not marry and married couples do not divorce. In each case the contact of the couple or the individual with the outside world is limited to exchange in goods, factor or asset markets. We have no theory analyzing the interdependence between labor and marriage markets. This universally accepted assumption of a predetermined marital status is puzzling in the light of more than a decade of contributions to the economics of marriage and an even older sociological literature on marriage markets (see Chapter 1).
