Volume 6 - Article 13 | Pages 355-382

To Tie the Knot or Not: Cohabitation, Marriage and Individuals' Attitudes to Risk

By Padma Rao Sahib, Xinhua Gu

Print this page  Facebook  Twitter


Date received:20 Dec 2001
Date published:23 May 2002
Word count:6131
Keywords:class partition, cohabitation, marriage, risk, risk aversion, stochastic dominance


This paper introduces imperfect information, learning, and risk aversion in a two sided matching model. The model provides a theoretical framework for the commonly occurring phenomenon of cohabitation followed by marriage, and is consistent with empirical findings on these institutions.
The paper has three major results. First, individuals set higher standards for marriage than for cohabitation. When the true worth of a cohabiting partner is revealed, some cohabiting unions are converted into marriage while others are not. Second, individuals cohabit within classes. Third, the premium that compensates individuals for the higher risk involved in marriage over a cohabiting partnership is derived. This premium can be decomposed into two parts. The first part is a function of the individual's level of risk aversion, while the second part is a function of the difference in risk between marriage and cohabitation.

Author's Affiliation

Padma Rao Sahib - Rijksuniversiteit Groningen, Netherlands [Email]
Xinhua Gu - University of Toronto, Canada [Email]

Most recent similar articles in Demographic Research

» Editorial for Special Collection on New Relationships from a Comparative Perspective
Volume 37 - Article 2    | Keywords: cohabitation, marriage

» From never partnered to serial cohabitors: Union trajectories to childlessness
Volume 36 - Article 55    | Keywords: cohabitation, marriage

» On the normative foundations of marriage and cohabitation: Results from group discussions in eastern and western Germany
Volume 36 - Article 53    | Keywords: cohabitation, marriage

» Impact of conjugal separation on women’s income in Canada: Does the type of union matter?
Volume 35 - Article 50    | Keywords: cohabitation, marriage

» The diffusion of cohabitation and children’s risks of family dissolution in Canada
Volume 35 - Article 45    | Keywords: cohabitation, marriage