Female Labor Market, Intra-household Allocation, and Marriage

This paper has constructed a theoretical model to explain why the share of those who remain unmarried has increased in Japan. It is still common for women to leave the labor market due to marriage and thereby see an irreversible decrease in their income. Taking into consideration of the intra-household negotiation for resource allocation, wives' lower income induces both household income and their own bargaining power to become lower. Given this structure, a woman may choose not to marry even if marriage leads to positive total gains for both herself and her potential husband. Based on this model, the increasing trend of differences in female wages between fulltime and part-time workers could be the most significant cause for the lower marriage rate in Japan.