September 2018

IZA DP No. 11823: The Empirical Content of Marital Surplus in Matching Models

published in: Economics Letters, 2019, 176, 51-54

This note investigates the extent to which structural estimates of marital surplus are informative about subjective well-being and separation. We first estimate the marital surplus using a simple matching model of the marriage market with perfectly transferable utility and heterogeneity in tastes applied to a rich German panel dataset. We then show that these estimates of the marital surplus are negatively correlated with separation and the difference in spouses' subjective satisfaction.