Explaining the gap between the theoretical prediction and experimental evidences about the investment in the spouse's human capital

Abstract: Economic theory that assumes personal income maximization predicts that a wife will under invest in her husband''s human capital. However, casual observation of real life marriages and experimental evidences show that outcomes are more efficient than the theoretical prediction. This paper argues that the gap between the theoretical prediction and experimental evidences is due to inappropriate assumptions in the theory. That is, the bias in the theoretical prediction is caused by the neglect of the non-material factors that play crucial roles in marriage and the neglect of the fact that individuals may behave altruistically in marital decisions. [Copyright &y& Elsevier]