Template-Type: ReDIF-Paper 1.0
Title: Cohabitation, Child Development, and College Costs
Author-Name: Efi Adamopoulou
Author-Email: adamopoulou@uni-mannheim.de
Author-Name: Anne Hannusch
Author-Email: hannusch@uni-bonn.de
Author-Name: Karen Kopecky
Author-Email: karen.kopecky@clev.frb.org
Author-Name: Tim Obermeier
Author-Email: tim.obermeier@leicester.ac.uk

Classification-JEL: D15, E24, J12, J22, J24
Keywords: cohabitation, marriage, child development, time and money investments,
human capital accumulation, college costs

Abstract: Why do U.S. college-educated couples with children marry at higher rates than those
without a college degree? We argue that investing in children is more valuable for
college-educated couples, who are more likely to send their children to college. Marriage,
which entails lower separation risk and more equal asset division if separation
does occur, provides insurance to the lower-earning spouse, which facilitates child
investment. Using an OLG model of marriage, cohabitation, wealth accumulation,
and educational investments where college completion is risky, we find that insurance
through marriage is particularly important when investing in children is costly
and college costs are high.

Note: 
Length: 78
Creation-Date: 2025-01
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp628
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_628