Topic：Who marries whom in a surging housing market?
Abstract：This paper investigates the impact of a surging housing market on marital sorting. To cover the increasingly large down payments required in China today, both spouses’ parents have to hand over their resources to support the couple in purchasing a new home. The incentive to extend credit to make a down payment motivates individuals to “marry up,” and, therefore, predicts an equilibrium of positive assortative matching by parental wealth. Our difference-in-differences analysis shows that for husbands, when the down payment doubles, one more year of paternal schooling predicts a marriage in which the father-in-law’s schooling is 0.060 year greater than in a scenario in which the down payment does not increase. Despite increasing social stratification, we find that a divorce reform, which award assets proportionate to the shares of the initial down payment (rather than awarding equal shares) upon divorce, can alleviate marital sorting.
Date: Wednesday, November 6
Location：Academic Hall 712