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The supply and demand of marital contracts: the case of same-sex marriage

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Abstract

Each state offers a standard marital contract and controls access to it. Married couples enjoy many benefits under U.S. federal and state laws, such as veteran and military pensions, immigration preference, Social Security payments, and tax deductions. Although many of these benefits were introduced for other purposes, we argue that the growth in welfare programs indirectly increased the value of the marital contract over time. In 2015, the Supreme Court ruled that same-sex couples could now access marital contracts—and consequently the benefits tied to marital status—in all 50 U.S. states. We view the legalization of same-sex marriage as the predictable supply response to an increase in the demand for access to the marital contract, which followed from an increase in its value over time. We test this hypothesis at both state and federal levels. Using cross-sectional data at the state level, we show that variation in state spending on benefits can explain variation in the length of years that same-sex marriage was legalized in a state prior to Obergefell. At the federal level, we show how federal expansions of benefits over time corresponded to increased expenditures on lobbying for same-sex marriage.

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Fig. 1
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Source: USAFacts. Adjusted for inflation

Fig. 3

Source: USAFacts

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Fig. 5

Source: USAFacts. Adjusted for inflation

Fig. 6

Source: USAFacts. Adjusted for inflation

Fig. 7

Source: Open Secrets

Fig. 8

Source: Badgett and Mallory (2014)

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Notes

  1. https://www.americanbar.org/groups/litigation/publications/litigation_journal/2018-19/summer/marital-privileges/.

  2. https://www.gao.gov/assets/gao-04-353r.pdf.

  3. https://www.pewforum.org/fact-sheet/changing-attitudes-on-gay-marriage/.

  4. These changes have spurred a series of debates over the social value of marriage (Posner, 1997; Girgis et al., 2011; Mercier, 2008; Badgett, 2009), its implications for children (Meezan and Rauch, 2005; Tasker, 2010), and religious commitments (Severino, 2006).

  5. Note that some research suggests that the legalization of same-sex marriage can also produce a backlash response that reinforces pre-existing negative attitudes towards same-sex marriage (Ofosu et al., 2019; Drydakis, 2021).

  6. It is worth noting that the increased rates of same-sex marriage have not affected pre-existing rates of opposite-sex marriage (Dillender, 2014; Carpenter, 2020; Carpenter et al., 2021; Delhommer and Hamermesh, 2021).

  7. Although we do not examine it in detail, the question of why governments standardize the marital contract remains open (Allen, 1990). As Cohen (1987) points out in his contractual analysis of marriage, lifelong spousal investments vary in important ways, so standardization might be a way to curb male opportunism. This, of course, could be less relevant to same-sex relationships, but our project does highlight a different motivation for standardization, namely, to reduce transaction costs when pecuniary assets are distributed by the government. We thank an anonymous reviewer for drawing our attention to this question.

  8. The lack of recognition led to United States v. Windsor, a groundbreaking 2013 case that ruled in favor of a widow living in New York who had been denied the benefit of spousal deduction for federal estate taxes and left with a $363,000 estate tax bill because the federal government did not recognize her deceased same-sex partner as a spouse, even though the couple had been legally married in Canada.

  9. Some scholars trace common law marriage back to the Catholic Church’s influence over Western law (Berman, 1985).

  10. https://www.ncsl.org/research/human-services/common-law-marriage.aspx.

  11. https://rmolawyers.com/the-guide-to-marvin-claims-for-unwed-partners/.

  12. While other contractual options (e.g., living wills) could potentially fill some of these gaps, they are still unable to approximate the full extent of marital benefits (especially federal benefits). Attempts by states to pass domestic partnerships and civil unions highlight the fact that sufficient contractual remedies did not exist under the current system. While we do not explore this possibility in detail, our theory predicts that other countries with common law systems would follow similar pathways to same-sex marriage (as opposed to civil-law countries, which may involve better contractual options for same-sex couples).

  13. https://www.caregiver.org/resource/legal-issues-lgbt-caregivers/

  14. https://www.nytimes.com/2019/06/19/us/legal-history-lgbtq-rights-timeline.html.

  15. https://www.hrc.org/news/four-cases-that-paved-the-way-for-marriage-equality-and-a-reminder-of-the-w.

  16. https://www.unmarried.org/parents-children/adoption/

  17. https://www.nytimes.com/2019/06/19/us/legal-history-lgbtq-rights-timeline.html.

  18. https://www.census.gov/library/stories/2020/09/fifteen-percent-of-same-sex-couples-have-children-in-their-household.html.

  19. https://militarybenefits.info/5-top-military-spouse-benefits/.

  20. https://taxfoundation.org/federal-tax-laws-and-regulations-are-now-over-10-million-words-long/.

  21. https://www.elderlawanswers.com/medicaid-protections-for-the-healthy-spouse-12019.

  22. Becker (1983) also shows that interest groups seeking a subsidy will be smaller than those taxed, or in common public choice parlance, benefits are concentrated and costs are dispersed.

  23. A similar logic applies to same-sex marriage bans. While there was resistance to the rise of same-sex marriage in the form of state bans, eventually the interest group pressure for same-sex marriage at the federal level outweighed the interest group pressure against it at the state levels, leading to a federal protection of same-sex marriage. We thank an anonymous reviewer for raising this point.

  24. Priest (1977) applied this logic to judicial cases, as may be the case with the repeated number of court cases over rights pertaining to marriage brought forth by same-sex couples against the states.

  25. For example, the surviving spouse of a veteran does not have to pay property taxes in Tennessee (https://www.tn.gov/veteran/veteran-benefits/tn-state-benefits/homeowners/property-tax-relief-for-surviving-spouses.html), and Medicaid’s spousal income allowances vary by state (https://www.medicaidplanningassistance.org/mmmna-definition/).

  26. Because these numbers are already adjusted for income, and since we include a measure of urban density as a variable, we forgo including median household income as a control variable across states to avoid multicolinearity.

  27. Of course, this runs contrary to some conventional wisdom that simply views Clinton as the president who implemented “Don’t Ask, Don’t Tell” and signed the Defense of Marriage Act.

  28. We include Table 5 in our Appendix which gives the dates and names of each of these cases, as well as the year of legalization of same-sex marriage (and/or comprehensive civil unions and domestic partnerships).

  29. Table 6 gives similar results as our main table, Table 2, when we use an indicator for our dependent variable and run a logit

  30. We thank an anonymous reviewer for making this point

  31. https://www.opensecrets.org/federal-lobbying/industries/summary?cycle=2022&id=J7300

  32. For a collection of records on the history of the United States Veterans Administration, see https://archives. lib.umn.edu/repositories/11/resources/598

  33. Surviving widows of Civil War veterans were still receiving Civil War pensions as late as 1999 (https://www. ssa.gov/history/briefhistory3.html).

  34. https://www.archives.gov/publications/prologue/1998/summer/women-and-naturalization-1.html.

  35. https://www.uscis.gov/laws-and-policy/legislation/immigration-and-nationality-act.

  36. The United States has a riddled history of sexual minority immigration exclusions. The Immigration Act of 1917, for instance, restricted sexual minority immigration, or what they called those who exhibited “constitutional psychopathic inferiority” (Carro, 1989). Up until 1963, homosexuality was labeled as a disease in the Diagnostic and Statistical Manual of Mental Disorders (DSM) (Drescher, 2015), which is what allowed for many immigration restrictions on the basis of “psychopathy.” The Immigration Act of 1965 labeled sexual minorities as “sexual deviants” (Public Law 89-236), and up until 2010, individuals living with HIV/AIDS could not travel or emigrate to the United States (Winston and Beckwith, 2011). See Carro (1989) for a deeper history of the many laws against sexual minorities, especially with regard to their immigration status.

  37. As Titshaw (2010) details, although states typically define what constitutes marriage, Congress has historically had the authority to override certain types of marriages. Specifically, marriage fraud, unconsummated proxy marriage, polygamy, and same-sex marriage (up until Windsor) were excluded.

  38. Importantly, though, there were two rare exceptions: “Although same-sex relationships still are not recognized for the purpose of issuing most benefits under the INA, the USCIS [U.S. Citizenship and Immigration Services] and State Department now recognize non-marital life partnerships in two instances. First, if one of the partners has a visa to reside in the United States for temporary work or study, that person’s foreign partner may accompany him or her in B-2 visitor (tourist) status. Second, the State Department recently changed its regulations to allow it discretion in granting derivative status to the partners of U.S. diplomats, consular officers and some other foreign officials if the partnership is legally recognized in the sending country.” See Titshaw (2010) for further details.

  39. We thank an anonymous reviewer for pointing us to this research.

  40. https://www.taxpolicycenter.org/statistics/standard-deduction

  41. https://taxfoundation.org/tax-cuts-and-jobs-act-marriage-penalty/

  42. https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/.

  43. https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf.

  44. https://www.aarp.org/retirement/social-security/questions-answers/same-sex-couples-social-security.html.

  45. https://www.npr.org/2013/03/23/175119416/gay-lobbying-on-the-hill-has-short-yet-strong-history.

  46. https://www.politico.com/story/2013/03/lgbt-lobby-spends-in-off-years-089381.

  47. https://www.opensecrets.org/orgs/family-research-council/lobbying?id=D000025756&lobbillscycle=2022.

  48. https://www.opensecrets.org/spending-section.

  49. As Badgett and Mallory (2014) note, there is a “Windsor” effect in which the number of same-sex marriages increased post-Windsor ruling. However, in New York, this effect is counteracted by the fact that New York had just legalized in 2011, so much of the pent-up demand had already been satisfied.

  50. We thank any anonymous reviewer for making this point.

  51. https://www.nytimes.com/2004/05/18/us/same-sex-marriage-the-overview-hundreds-of-same-sex-couples-wed-in-massachusetts.html

  52. https://portal.ct.gov/-/media/Departments-and-Agencies/DPH/Vital-Statistics/Registration-Reports/Reports/RR2015.pdf?la=enp.41.

  53. These countries are Andorra, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Colombia, Costa Rica, Cuba, Denmark, Ecuador, Finland, France, Germany, Iceland, Ireland, Luxembourg, Malta, Mexico, the Netherlands, New Zealand, Norway, Portugal, Slovenia, South Africa, Spain, Sweden, Switzerland, Taiwan, the United Kingdom, and Uruguay.

  54. https://ifstudies.org/blog/pro-natal-policies-work-but-they-come-with-a-hefty-price-tag

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Acknowledgements

We would like to thank participants of the 2021 APEE meetings, especially Ennio Piano and Bryan Cutsinger, for their helpful comments on an earlier draft. We are also grateful to editor Peter Leeson for guiding us through the revision process and to four anonymous reviewers for their constructive criticism.

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Appendix 1

Appendix 1

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Table 5 State-level changes to the marital contract

5 and

Table 6 Determinants of state legalization before 2015

6.

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Piano, C.E., Behr, R. & West, K.R. The supply and demand of marital contracts: the case of same-sex marriage. Public Choice 198, 237–268 (2024). https://doi.org/10.1007/s11127-023-01076-7

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