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Thesis

Essays on complementarities in bipartite matching and in policy combination -PhD thesis-

Authors

Publication date

2014

Summary

This dissertation contains three essays on the implications of
complementarities on the equilibrium sorting in the marriage market, and
on the optimal bundling of different development policies. This first
chapter develops and tests a model of marital sorting on gender-role
attitudes and intrahousehold time allocations with search frictions in
the marriage market, and endogenous intrahousehold bargaining power. It
is shown that individuals develop a marital taste for similar gender
culture partners in order to avoid conflict in decision-making within
their future households. This incentive for matching assortatively is
stronger for individuals anticipating little say in intrahousehold
decision-making. Using data from the British Household Panel Survey, it
is shown that the ability that a woman has to guide the extensive margin
of her labor market supply according to her own gender-role attitudes,
is entirely driven by her search for a same-attitudes partner while in
the marriage market. The second chapter provides empirical evidence on
whether health education and microfinance act as substitutes or
complements in reducing neonatal mortality. Identification exploits the
randomized placement of a health educational intervention in rural
India, stratified by the presence of a pre-existing microfinance
intervention, together with the longitudinal dimension of our dataset.
We find that the two interventions substituted each other: both were
more effective when offered in isolation then when offered together.
Further analysis shows that these interventions operated through
different and substitutable channels. The health education intervention
increased the adoption of hygienic health behaviours in home deliveries,
whereas the microfinance intervention increased payments made to
traditional birth attendants. These findings challenge the preconceived
policy notion that complementarities between these two ingredients for
development call for their joint supply. In contrast, they suggest that
policy makers may get more out of each by offering them in isolation to
their communities. The final chapter analyses a decentralized
two-dimensional marriage market model with transferable utility, where
individuals’ attributes are uniformly distributed on the unit square. I
first show that matching of likes along both dimensions is the
competitive equilibrium when the geometric average within-attribute
complementarity is greater than the geometric average between-attribute
complementarity. A finding that nests, as a special case, Becker’s
assortative matching result, and is in contrast to previous literature
suggesting that the concept of assortative matching is not well defined
in multi-dimensions. I then show that away from their optimal
(similar-type) partners, individuals are willing to compensate
mismatches on one of the attributes with opposite mismatches on the
other attribute. A finding that in turn sheds new light on the
trade-offs that individuals make in less than perfectly competitive
multidimensional marriage markets, such as those plagued by search
frictions.

Subjects

Economics and Health

Links

http://discovery.ucl.ac.uk/1437396/

#523236


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