This paper explores the role of marriage when markets are incomplete so that individuals cannot diversify their idiosyncratic labor income risk. Ceteris paribus, an individual would prefer to marry a hedge (i.e. a spouse whose income is negatively correlated with her own) as it raises her...

Why do some U.S. states have higher levels of marital formation than others? This paper introduces an economic model wherin a state s representative individual may choose to marry in order to diversify his or her idiosyncratic income risk. The paper demonstrates that such a diversification...

This paper explores the role of marriage when markets are incomplete so that individuals cannot diversify their idisyncratic labor income risk. Ceteris paribus, an individual would prefer to marry a "hedge" (i.e. a spouse whose income is negatively correlated with her own) as it raises her...