Social norms, partnerships and children

This paper presents a social norms interpretation to explain cross-country differences in partnership formation rates. Social norms are modeled as a constraint on the allocation of household labor that diminishes the gains of entering a partnership, especially for highly educated women with a higher opportunity cost of time. Results using individual level data from 7 waves of the European Community Household Panel (1995?C2001) confirm the predictions from the theory. These results are robust to controlling for country varying factors such as childcare policies and divorce rates, and are mostly driven by marriage (as opposed to cohabitation) decisions. Given that household formation is a necessary prerequisite to having children, our results potentially shed light onto the process of below replacement fertility and the economic challenges associated with it.