A Theory of Women's Welfare Dependency, Marriage, and Labor Supply," Labour

This paper provides a rational choice model that simultaneously analyzes women’s decisions about welfare dependency, labor supply, and marriage. The model is based on the Demand and Supply (D&S) models of marriage inspired by Becker’s theory of marriage. In addition to reproducing old insights about income effects and marriage market effects on welfare dependency, the model offers new insights regarding the effects on welfare dependency of sex ratios, divorce laws, cohort size, and traditional expectations about marriage and family. The model helps understand why welfare is more common among black women in the U.S and offers a new interpretation for past trends in American women’s welfare dependency: the big increase in welfare dependency in the late 1960s is interpreted as a baby-boom phenomenon and recent reductions in welfare dependency are partially seen as the expression of young women’s better marriage market opportunities. 1