Research

Since 2008 birth rates have fallen about twice as fast as fertility intentions and the standard economic explanations account for little of the difference. Is the shortfall delay—marriage postponed, leaving less time in the state where births are most likely—or decline, fewer births at a given age, married or not? A falling birth rate looks the same whether children became less wanted or harder to have, so a model is needed to distinguish between them. I estimate a marriage matching model with endogenous divorce and fertility, using American Community Survey microdata for 2008–2023. I then hold each estimated component at its 2008 value in turn, re-solving the marriage market and retracing the fertility decisions that follow. What a marriage is worth did not fall: the value of shared children hardly moves over the window, and the payoff to a match rose. What rose is the cost of forming a marriage, and what fell is the return to a birth outside it; both are concentrated on the young, and the estimated components together account for two-thirds of the simulated fall. Within marriage there is hardly any fertility decrease to explain. Payments tied to births within marriage therefore address a margin that barely moved, while the barriers to household formation facing adults under thirty did.

Across many advanced economies, household formation in recent times has been shaped by the so-called `second demographic transition,' with marriage declining, cohabitation expanding, and both divorce and separation hazards falling. Using four decades of monthly U.S. demographic data, I first document three facts: (i) marriage has declined while cohabitation has risen, (ii) both unions have become more stable over time, and (iii) there are two inflection points---the mid-1990s, when substitution from marriage to cohabitation accelerated, and after the 2008 financial crisis, when remaining single became more common. Existing static or dynamic-stationary models cannot explain why fewer matches are formed even as those that do persist are more stable. To address this gap, I develop and estimate a dynamic, non-stationary marriage matching model with endogenous dissolution which allows for both marriage and cohabitation. The estimates show that rising match-formation costs outpaced surplus gains, reducing partnership formation, while marriage stability is driven by rising surplus and cohabitation stability by higher dissolution costs. Policy reforms in the 1990s coincide with the marriage-cohabitation substitution, and counterfactuals indicate that, coming out of the 2008 crisis, had house prices not risen so sharply, marriage formation would have been higher while cohabitation would have decreased. 

We study distribution of labor with a model relying on one-to-one matchings of workers on which occupational choice is a constraint. We show this formulation of the model to be consistent with empirical observations of skill-based wage inequalities observed in the American market. We study theoretical properties, like existence and uniqueness of optimal solutions and stability results which indicate the behaviour of the labor market when either the original population or the production function changes. The techniques used to investigate such a model rely on optimal transport methods which allow us to provide quantitative tools to analyze and predict these changes. This model provides new understanding of wage inequalities across and within firms relating them to relative skill contributions to production (through matched worker-firm pairs).