Chapter 3 The formation and dissolution of families: Why marry Who marries whom And what happens upon divorce This chapter describes the economic reasons for marriage how families solve their economic problems the marriage market divorce and its economic consequences and the future of the family. A successful theory which is capable of explaining the data on marriage and divorce must incorporate ideas from sociology biology and other fields. An understanding of the economic point of view can be helpful in the construction of a unified approach. Despite its firm roots in nature and its antiquity in human society the future of the family institution is recently put into question. The recent trends of declining marriage rates declining fertility rates higher divorce rates and the rise in alternative arrangementssuch as cohabitation single person households and single mother familiesare common to many western societies. Easterlin (1987) argues that if the offsprings cohort is large relative to the parents cohort (e.g. the baby boomers) then economic pressures and the desire to imitate their parents consumption standards will force the youngsters to postpone marriage and have smaller families. This line of argument suggests that the current pressures on the family are cyclical in nature and will diminish as fertility declines.