To assess the child welfare impact of policies governing divorced parenting, such as child support orders, child custody assignments, and marital dissolution standards, one must consider their influence not only on the divorce rate but also on spouses’ fertility choices and child investments. We develop a model of fertility, parenting, and divorce, from which we derive estimates of parental preferences and a child cognitive ability production function, using data on parental time allocation, children’s cognitive attainment, and realized fertility and divorce. Family policies that reduce divorce are simulated to have significant negative impacts on both fertility and child development.

This paper examines the effects of the Big Five personality traits on labor market outcomes and gender wage gaps using a job search and bargaining model with parameters that vary at the individual level. The analysis, based on German panel data, reveals that both cognitive and noncognitive traits significantly influence wages and employment outcomes. Higher conscientiousness and emotional stability and lower agreeableness levels enhance earnings and job stability for both genders. Differences in the distributions of personality characteristics between men and women account for as much of the gender wage gap as do the large differences in labor market experience.