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Mahr: A Prenuptial Agreement in Islamic Marriage Contracts and Its Impact on Divorce Outcomes

Abstract

Mahr—a monetary gift promised by the groom to the bride at the time of marriage—is a mandatory part of prenuptial agreements in Islamic marriage contracts and can play a crucial role in divorce cases. I investigate how mahr affects the intrahousehold bargaining power of couples in their divorce outcomes using a 2013 reform in Iran. Since only men have the right to finalize a divorce, women usually forfeit part of their mahr to negotiate for the husband’s approval of the divorce request. The new law capped the value of mahr at 110 gold coins (around $35k USD), with any additional payment conditional on men’s individual wealth. I use a theoretical model of Islamic marriage and divorce to shows how mahr alters a couple’s choice about divorce and their market outcomes such as final mahr payments and child custody agreements. I provide empirical evidence, using a set of hand-collected data, that supports the predictions of this model for divorces and the impacts of the reform. Compared to the initial amount promised in male-initiated divorces, actual payment of mahr decreased substantially, whereas mahr paid in divorces initiated by women showed no significant decrease. Even though the proportion of cases involving children and the probability of the mother getting custody does not change, the probability of receiving child support for mothers with custody shows a significant decline, consisting with the policy decreasing women’s negotiation power.  

JEL Codes: D86, D19, J4, J1, J16

Keywords: Islamic Marriage, Mahr, Contracts, Divorce, Gender, Intrahousehold Bargaining 

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