We develop an equilibrium lifecycle model of education, marriage, labor supply and consumption in a transferable utility context. Individuals start by choosing their investments in education anticipating returns in the marriage market and the labor market. They then match based on the economic value of marriage and on preferences. Equilibrium in the marriage market determines intrahousehold allocation of resources. Following marriage households (married or single) save, supply labor and consume private and public commodities under uncertainty. Marriage thus has the dual role of providing public goods and offering risk sharing. The model is estimated using the British HPS.
D58: Computable and Other Applied General Equilibrium Models
I00: Health, Education, and Welfare: General
C78: Bargaining Theory; Matching Theory
D13: Household Production and Intrahousehold Allocation
D81: Criteria for Decision-Making under Risk and Uncertainty