Sunday 2013-01-13

The marriage market seems to be undergoing large structural shifts recently. An Atlantic piece on online dating negatively impacting monogamy can be summarized as: online dating reduces the search cost of dating, which induces marginally committed people to drop the current relationship.

The reduced search cost is only the fringe of the changes occurring in the marriage market. Growing economic inequality will at the margin tempt high-income people to maintain several relationships with low-income people in order to create a competitive market for the high-income's attention. That market discipline should on average allow the high-income to capture more of the relationships' consumer surplus.

Most legal systems further increase the cost of marriage, as the legal construct of marriage has major exit costs. One only has to look at the costs of divorce across countries (here in SG, it's a 50% split in assets) to see why fewer high-income people would enter into marriage contracts.

As an aside, Singapore's 50% split fosters assortative mating, i.e. marriage between people of the same economic class, as the assets of the bride and groom are more similarly sized prior to marriage and post-divorce, than were they of different economic classes. Additionally, adultery results in far more detrimental asset splits. Furthermore, SG courts throw out pre-nups. All of which raises the effective cost of marriage contracts to high-income people.

At risk are the children as it's fairly easy for wealthy individuals to avoid parental obligations (despite int'l deadbeat parent agreements). Some will argue for a War On Single-Parenthood, increasing the penalties / costs of separation post-procreation, which will reduce the number of children conceived by high-incomes. Alternatively, reducing the costs of separation and support will induce more children of high-incomes.

Each society must choose which path to follow, however it seems that many are delaying reforming their legal systems. Just as many adults are delaying getting married.