Martial Property Regimes and Investments

This paper presents estimates of the causal effect of the default marital property regime on female labour supply, fertility, marriage, and marital dissolution rates utilising the regional variation in the default marital property system in Spain and the 2005 divorce reform. Property rights theory predicts that under contractual incompleteness ownership of physical assets affects investments, and that joint ownership provides the strongest incentives to make relationship-specific investments, while non-integration encourages non-specific investments. My findings are consistent with these predictions: separation of property promotes higher female labour supply, having no more than two children, and a lower marriage rate than community property. The divorce rate remains largely unaffected by the property regime type.

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