Journal Article

The empirical content of marital surplus in matching models

January 6, 2019

Economic Letters, Vol. 176, March 2019, pp. 51-54

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This note investigates the extent to which structural estimates of marital surplus are informative about subjective well-being and separation. We estimate marital surplus using a matching model á la Choo and Siow (2006) on a rich German panel dataset. We show that separation is negatively correlated with the estimated marital surplus, households’ total subjective life satisfaction is negatively correlated with unequal sharing of the surplus whereas the difference in spouses’ subjective satisfaction is negatively correlated with the marital surplus but positively correlated with unequal sharing.