We reconsider the well-known Becker–Coase (BC) theorem according to which changes in divorce law should not affect divorce rates. We do that in a context of households that consume public goods in addition to private goods. For the Becker–Coase theorem to hold in this setting, utility must be transferable both within marriage and upon divorce, and the marginal rate of substitution between public and private consumption needs to be invariant in marital status. We show that if divorce alters the way some goods are consumed (either because some goods that are public in marriage become private in divorce or because divorce affects either the marginal rate of substitution between public and private goods or even the cardinalization of a spouse’s utility), then the Becker–Coase theorem holds only for very specific preferences. We conclude that, in general, divorce laws will influence the divorce rate, although the impact of a change in divorce laws can go in either direction.

Before the Industrial Revolution, most scientists considered fertility, mortality and population as interacting with economic circumstances. When Khaldun (1377) pioneered classical economics, he described how population interplays with the rise and decline of cities by allowing a deeper division of labor and generating increasing returns to scale. When, in the 17th century, Petty (1687) compared the relative development of England, France, and Holland, population was at the center of his calculations, both as an outcome and source of wealth. And, according to the French physiocrats (Mirabeau 1756) as well as Bruckner (1768), who foreshadowed the Malthusian view on population checks by half a century, population needed to be incentivized to grow.

We study the impact of capital and labor taxation in an economy where couples bargain over the intrahousehold allocation under limited commitment. In this framework more wealth improves commitment and gives rise to insurance gains within the household. Our theory motivates these gains by the empirical observation that wealth, in contrast to labor income, is a commonly held resource within households. Based on this observation we study whether eliminating capital taxes from the economy, and raising labor taxes to balance the government’s budget, may generate welfare gains to married households. We illustrate that the quantitative effects from this reform are rather small. We attribute the small effects to the life cycle pattern of wealth accumulation and to the impact of labor income taxes on household risk sharing: In particular, we show that higher labor taxes may make the limited commitment friction more severe, even though they may make the distribution of labor income more equitable within the household.

In order to credibly “sell” legitimate children to their spouse, women must forego more attractive mating opportunities. This paper derives the implications of this observation for the pattern of matching in marriage markets, the dynamics of human capital accumulation, and the evolution of the gene pool. A key consequence of the trade-off faced by women is that marriage markets will naturally tend to be hypergamous – that is, a marriage is more likely to be beneficial to both parties relative to remaining single, the greater the man’s human capital, and the lower the woman’s human capital. As a consequence, it is shown that the equilibrium can only be of two types. In the “Victorian” type, all agents marry somebody of the same rank in the distribution of income. In the “Sex and the City” (SATC) type, women marry men who are better ranked than themselves. There is a mass of unmarried men at the bottom of the distribution of human capital, and a mass of single women at the top of that distribution. It is shown that the economy switches from a Victorian to an SATC equilibrium as inequality goes up.

The model sheds light on how marriage affects the returns to human capital for men and women. Absent marriage, these returns are larger for women than for men but the opposite may occur if marriage prevails. Finally, it is shown that the institution of marriage may or may not favour human capital accumulation depending on how genes affect one’s productivity at accumulating human capital.

Gary Becker, an American economist, died on May 3, 2014, at the age of 83. His major contribution was the systematic application of economics to the analysis of social issues. He used economics to study discrimination, criminal behavior, human capital, marriage, fertility and other social issues.

Migrant networks play an important role in explaining the size and structure of migration flows. They affect the private costs and benefits of migration (assimilation channel) and lower legal entry barriers through family reunification programs (policy channel). This paper presents a micro-founded identification strategy allowing to disentangle the relative importance of these two channels. Our empirical analysis exploits US immigration data by metropolitan area and country of origin. We first find that the elasticity of migration flows to network size is around one. More interestingly, we show that the policy channel accounted at most for a quarter of this elasticity in the 1990s, and the magnitudes of the total network effect and the policy channel are greater for low-skilled migrants. Our results are strongly robust to sample selection, identification assumptions, and treatment for unobserved bilateral heterogeneity. Furthermore, the policy channel was stronger in the 1990s than in the 1980s, possibly reflecting the changes in the US family reunification policies. We conclude that the government capacity to curb the migration multiplier exists, but is limited.

The data show that an increase in government provided old-age pensions is strongly correlated with a reduction in fertility. What type of model is consistent with this finding? We explore this question using two models of fertility, the one by Barro and Becker (1989), and the one inspired by Caldwell and developed by Boldrin and Jones (2002). In the Barro and Becker model parents have children because they perceive their children’s lives as a continuation of their own. In the Boldrin and Jones’ framework parents procreate because the children care about their old parents’ utility, and thus provide them with old age transfers. The effect of increases in government provided pensions on fertility in the Barro and Becker model is very small, and inconsistent with the empirical findings. The effect on fertility in the Boldrin and Jones model is sizeable and accounts for between 55 and 65% of the observed Europe–US fertility differences both across countries and across time and over 80% of the observed variation seen in a broad cross section of countries. Another key factor affecting fertility the Boldrin and Jones model is the access to capital markets, which can account for the other half of the observed change in fertility in developed countries over the last 70 years.

We provide a new explanation for the narrowing and reversal of the gender education gap. We assume that parents maximize the full income of their children and that males have an additional income, independently of education. This additional income biases preferences toward sons and implies that females have relative advantage in producing income through education. When the returns to human capital are low, the bias toward sons is high, so that parents whose first newborns are females have more children. Consequently, daughters are born to larger families and hence receive less education. As returns to human capital increase, gender differences in producing income diminish, bias toward sons declines, variation in family size falls and the positive correlation between family size and the number of daughters is weakened. Ultimately, the relative advantage of females in education dominates differences in family size, triggering the reversal in the gender education gap.

This paper provides a closed-form solution for the health capital model of health demand. The results are exploited in order to prove analytically the comparative dynamics of the model. Results are derived for the so-called pure investment model, the pure consumption model and a combination of both types of models. Given the plausible assumptions that (i) health declines with age and that (ii) the health capital stock at death is lower than the health capital stock needed for eternal life, it is shown that the optimal solution implies eternal life.

In his seminal, 1973 paper, published in the Journal of Political Economy, Gary Becker emphasizes marriage as a crucial, yet understudied issue to which economic analysis could, therefore should, be applied. In his words:

This article provides a comprehensive picture of the National Transfer Accounts (NTA), a project that aims at measuring how people produce, consume, save, and share economic resources at every age. It stands today with a unique dataset that includes 47 countries from around the world, permitting a comparative understanding of economic flows within and between generations and over time.

The Integrated Public Use Microdata Series (IPUMS)-International partnership is a project of the Minnesota Population Center and national statistical agencies, dedicated to collecting and distributing census data from around the world. IPUMS is currently disseminating data on over a half-billion persons enumerated in more than 250 census samples from 79 countries. The data series includes information on a broad range of population characteristics, including fertility, nuptiality, life-course transitions, migration, labor-force participation, occupational structure, education, ethnicity, and household composition. This paper describes sample characteristics and data structure; the data integration process including the creation of constructed family interrelationship variables; the flexible dissemination system that enables researchers to build customized extracts of pooled census samples across time and place; and some of the most significant findings that have emerged from the database.

Gary Becker's theories of marriage were mentioned as one of the reasons why he was awarded the Nobel prize in economics in 1992 and were emphasized by Becker: his first article on the family published in a major journal (Becker 1973) is a theory of marriage and the chapters on marriage in his influential Treatise on the Family (Becker 1981, 1991) come first. Becker's theoretical models of marriage all view marriages as small non-profit firms engaged in household production, thereby featuring one of the basic tenets of the New Home Economics that Becker pioneered with Jacob Mincer while both were at Columbia University in the 1960s (see Becker 1960, 1965; Mincer 1962, 1963).

Bailey and Collins (2011) argue that Greenwood, Seshadri, and Vandenbroucke’s (2005) hypothesis that the baby boom was partly due to a burst of productivity in the household sector is not supported by evidence. This conclusion is based on regression results showing that appliance ownership is negatively correlated with fertility. They also argue that the Amish, who limit the use of modern technology, had a baby boom. First, it is demonstrated that a negative correlation between appliance ownership and fertility can arise naturally in Greenwood, Seshadri, and Vandenbroucke’s model. Second, evidence is presented casting doubt on the presumed technology phobia of the Amish.

Gary Becker’s work on “human capital” started around 1960. It was motivated by the rising interest in economic growth at the time. As stated in the introduction to the first edition of his book, Human Capital, “The origin of this study can be traced to the finding that a substantial growth in incomes in the US remains after the growth of physical capital and labor has been accounted for”. This unexplained residual suggested to several researchers that unmeasured features of the quality of the labor force must also be brought into consideration. While econometricians such as Edward Denison, Dale Jorgenson, and Zvi Griliches turned to seek better data that would reduce the scope of the unexplained residual, Becker constructed a detailed and original theory regarding the possible effects of a major unobserved and all inclusive factor, termed, human capital, would have on observed outcomes such as wages and education and their variation over time and among individual types. Most of the theoretical results reported in the three editions of Human Capital, 1964, 1975, and 1995 are already anticipated in a single early paper that was published in the Journal of Political Economy in 1962.