We build an equilibrium search model where married couples make joint decisions on home production and labour market participation and analyse the implications of our results for a frictional marriage market. A worker's bargaining position reflects their productivity, and the productivity and employment status of their spouse. People sometimes accept transitory jobs only to raise the spouse's long-term wages. Firms sometimes reduce turnover by unilaterally increasing a worker's wage, ensuring that the spouse stays at home.

doi.org/10.1111/sjpe.12289
Scottish Journal of Political Economy
Incae Business School

Trejos, A, & Bonilla, R. (2021). Marriage and employment participation with wage bargaining in search equilibrium. Scottish Journal of Political Economy, 68(4), 517–533. doi:10.1111/sjpe.12289