AN INQUIRY INTO THE STATES ROLE IN MARRIAGE

I view state intervention in marriage as a means of avoiding large transaction costs between men and women. I define transaction costs as the resources devoted towards wealth capture and protection and I argue that they are high within a cohabitational contract. State intervention is successful because marriage creates incentives that make private enforcement relatively costly and because marriages tend to be homogeneous. I test the hypothesis by examining state responses to changing divorce laws and I find that these actions are consistent with the state increasing the social value of marriage by mitigating transaction costs. © 1990.