The Economics of Marriage: From Social Stability to Individual Choice

In 2023, the number of marriages in Taiwan dropped to 123,000 pairs, hitting a historic low. That same year, Japan's "lifetime unmarried rate" (the proportion still unmarried at age 50) reached 28.3% for men and 17.8% for women, both all-time highs. This is not a phenomenon unique to East Asia. From Northern Europe to Southern Europe, from North America to Australia, developed nations around the world are experiencing a similar trend: more and more people are choosing not to marry or to marry later. Is this the "fragility" of a younger generation? A "collapse" of values? Or the inevitable result of structural socioeconomic change? This article examines why the institution of marriage was established, why it is changing, and what adjustments might lie ahead, through the lens of economics and history.

I. The Economic Essence of Marriage

Gary Becker: Marriage as an Economic Institution

Gary Becker, the 1992 Nobel Laureate in Economics, was the first to systematically apply economic analysis to marriage and family in his groundbreaking work A Treatise on the Family. His core argument was that marriage is a "production partnership": two people unite because doing so is more efficient than living alone.^[1]

In Becker's framework, the sources of marital efficiency include:

• Specialization and division of labor: Traditionally, men focused on market labor while women focused on domestic work and childcare, a division that increased total household output.
• Economies of scale: Two people sharing housing, appliances, transportation, and other resources is more economical than each living separately.
• Risk sharing: When one party becomes unemployed or ill, the other can provide support, reducing the risk faced by each individual.
• Complementarity: Different skills, personalities, and resources complement each other, creating a synergy greater than the sum of its parts.

This analysis may seem to coldly reduce marriage to a calculation of "utility maximization," but it reveals an important truth: marriage is not merely the fruit of love; it is an institutional arrangement. It existed and persisted because it once solved certain practical problems.^[2]

The Historical Functions of Marriage

From a historical perspective, the institution of marriage served multiple functions:

Economic function: In agrarian societies, the family was the basic unit of production. Marriage combined land, labor, and tools, forming the foundation of agricultural production. Women managed the "domestic economy" (housework, childcare, weaving, animal husbandry), while men handled the "external economy" (farming, trade, military service). This division of labor persisted for millennia.^[3]

Social security function: In an era without state welfare, the family was the sole social safety net. When people fell ill, lost their livelihood, or grew old, they relied on the care of spouses and children rather than government relief. Marriage ensured intergenerational obligations and rights of care.

Property transmission function: Marriage defined legitimate heirs, ensuring that property was passed down within the family lineage. This was particularly important for the aristocracy, landowners, and merchant classes. Many traditional marriage rules (such as primogeniture and prohibitions on divorce) were tied to property inheritance.^[4]

Social control function: Marriage organized individuals into family units, facilitating household registration, tax collection, and corvee labor for the state. Married men were considered more "stable" and "responsible," and less likely to become sources of social unrest.

II. Drivers of Change: Why Marriage Is No Longer "Necessary"

Women's Economic Independence: The Collapse of the Division-of-Labor Foundation

In Becker's model, the core source of marital efficiency was "specialization": the husband works outside the home, the wife manages the household. However, this foundation began to crumble in the second half of the twentieth century. As women entered the labor market en masse, pursued higher education, and earned wages comparable to men, the traditional gender-based division of labor was no longer the optimal arrangement.^[5]

Research by Claudia Goldin (2023 Nobel Laureate in Economics) shows that changes in female labor force participation over the twentieth century followed a U-shaped curve: initially declining during early industrialization (as household production moved out of the home), then steadily rising from the 1960s onward to reach historic highs today. In many countries, women now outnumber men among university graduates.^[6]

When women can secure economic independence through their own work, the "economic necessity" of marriage diminishes dramatically. A woman no longer needs to depend on a man for survival resources; she can buy her own home, fund her own retirement, and raise children on her own. This does not mean women "don't need" partners, but that they can "choose" whether to have one. This is a fundamental transformation.

The Establishment of Social Safety Nets

The rise of the modern welfare state has significantly weakened marriage's "social security" function. Unemployment insurance, health insurance, pensions, and social assistance programs have transferred many risks once borne by the family to the state or society.^[7]

In traditional societies, unmarried elderly people faced dire prospects in old age: no children to care for them, no savings to fall back on. In modern societies, however, single individuals can rely on pensions for a living, long-term care insurance for assistance, and health insurance for medical treatment. The logic of "raising children to secure old age" no longer holds.

The Nordic countries represent the extreme end of this transformation. Sweden, Denmark, and Finland have built comprehensive welfare systems from cradle to grave, reducing individual economic dependence on the family to a minimum. Correspondingly, non-marital birth rates in these countries exceed 50%, and cohabitation has replaced marriage as the predominant form of partnership.^[8]

Contraceptive Technology and the Decoupling of Sex from Reproduction

The invention of the contraceptive pill in the 1960s was one of the most important technological revolutions in human history. For the first time, it gave women reliable control over fertility, separating sexual activity from reproduction. This had profound implications for the institution of marriage.^[9]

Before the widespread availability of contraception, marriage was the primary institution for "managing the consequences of sexual activity." Premarital sex could lead to out-of-wedlock births, which carried severe social stigma in traditional societies. Marriage provided a "legitimate" framework within which sex and reproduction could take place under social approval.

The pill changed this equation. Women could engage in premarital sex without fear of pregnancy; they could delay childbearing until their careers were established; they could choose not to have children at all. Marriage was no longer a prerequisite for sexual relationships, nor a prerequisite for reproduction.

Urbanization and Individualism

In traditional rural societies, individuals were deeply embedded in kinship and community networks. Marriage was not merely a matter between two people but an alliance between two families. Community opinion, family expectations, and traditional norms all pushed individuals strongly toward marriage.^[10]

Urbanization broke this social control. Individuals in cities are anonymous and mobile, no longer subject to the surveillance of close-knit communities. Family influence weakens, and personal choice expands. Social pressure such as "it's time to get married" or "not marrying is abnormal" persists but is far less powerful than in rural societies.

Accompanying urbanization is the rise of individualist values. People increasingly emphasize self-fulfillment, personal freedom, and quality of life over family duty, social obligation, and traditional norms. Marriage has shifted from "an obligation that must be fulfilled" to "an option that can be chosen."^[11]

III. The Rationality of Not Marrying: An Economic Analysis

Rising Opportunity Costs

From an economic perspective, marriage involves "opportunity costs": getting married means forgoing certain possibilities of single life. When the "returns" of single life increase, the opportunity cost of marriage rises accordingly.^[12]

The quality of life for modern singles is far higher than in the past. Convenience stores, food delivery services, and online shopping make living alone easy; social media, dating apps, and interest-based communities allow social needs to be met outside of marriage; career development, travel, and continuing education offer multiple channels for personal growth. Being single no longer equates to loneliness, inconvenience, or marginalization.

At the same time, the "costs" of marriage are also rising. High housing prices mean that starting a family requires greater financial investment; child-rearing costs are enormous, potentially running into millions of dollars to raise a child to adulthood; working women face a "family penalty" since marriage and childbearing often mean career interruption or deceleration. When costs are rising and benefits are uncertain, delaying or forgoing marriage becomes the rational choice.^[13]

Search Theory: Why "The Right One" Is Increasingly Hard to Find

The economic framework of "search theory" can explain why modern people marry late or not at all. In this framework, mate selection is a search process: people look for suitable partners in the market, and when they find one who is "good enough" (exceeding a certain threshold), they stop searching and marry.^[14]

In modern society, this search process has become more complex:

• Rising expectations: As women become economically independent, they no longer "need" marriage, raising the threshold: a partner must bring sufficient "additional value" to make marriage worthwhile.
• More options: Dating apps expose people to more potential partners, but this also makes it harder to "settle down," as there is always the feeling that someone better might be waiting.
• Lower search costs: In traditional societies, opportunities to meet the opposite sex were limited and search costs were high, so people tended to "take what they could get" early. In modern society, lower search costs allow people to continue searching for longer.

Ironically, more choices may lead to fewer marriages. Psychologist Barry Schwartz calls this the "paradox of choice": when there are too many options, people find it harder to make a decision and harder to feel satisfied with the decision they have made.^[15]

Structural Imbalances in the Marriage Market

The marriage market also faces structural supply-demand imbalances. Traditionally, women tended toward "hypergamy": marrying men with higher education, income, or social status than their own. This preference persists in many societies.^[16]

However, when women's education and income surpass men's, this preference creates structural problems. Highly educated, high-income women find their "upward" options limited, while less educated, lower-income men find themselves excluded from the marriage market. This "marriage squeeze" is particularly pronounced in East Asian societies.

Japan's "herbivore men," South Korea's "sampo generation" (giving up dating, marriage, and children), and Taiwan's "losers" all reflect this structural predicament. This is not merely a matter of individuals "not trying hard enough" but the result of broader socioeconomic structural change.^[17]

IV. International Comparison: Diverse Institutional Responses

The Nordic Model: Deinstitutionalization of Marriage

The Nordic countries have adopted the most radical institutional adjustments: "deinstitutionalizing" marriage, transforming it from a social necessity into a personal option. In Sweden, Denmark, and other Nordic nations, cohabitation enjoys nearly the same legal rights and obligations as marriage; children born outside of marriage are fully equal to those born within it; and single-parent families receive comprehensive social support.^[18]

The logic behind this institutional design is that the state should not favor any particular family form but should support all arrangements that care for children. Regardless of whether parents are married, cohabiting, or no longer together, children should receive quality care. This significantly reduces the pressure to "get married" and allows people to choose the form of partnership that suits their preferences.

It is worth noting that while fertility rates in the Nordic countries have declined, they remain higher than in East Asia; their child well-being indicators also rank among the best in the world. This suggests that the "deinstitutionalization" of marriage does not necessarily lead to social collapse or harm to children.^[19]

The French Model: The Innovation of PACS

In 1999, France created the "civil solidarity pact" (Pacte civil de solidarité, PACS), offering a legal option between cohabitation and marriage. PACS partners enjoy some of the rights of marriage (such as tax benefits and inheritance rights), but dissolving the relationship is easier than divorce.^[20]

PACS was originally designed for same-sex couples (at the time, France had not yet recognized same-sex marriage), but it was quickly adopted by heterosexual couples in large numbers. Today, the number of PACS registered in France each year is nearly equal to the number of marriages. This shows that many people indeed want an intermediate option that is "more secure than cohabitation but more flexible than marriage."

The Japanese Dilemma: The Cost of Institutional Rigidity

By contrast, Japan represents a case of institutional rigidity. Japan's marriage system remains highly traditional: it does not recognize cohabitation relationships, children born outside of marriage face discrimination, and married couples must share a surname (in practice, the wife almost always takes the husband's name). These rules conflict with modern values, yet conservative forces have blocked reform.^[21]

The result is that large numbers of people choose to "exit" the institution of marriage rather than change it. Japan's lifetime unmarried rate continues to climb, the fertility rate has fallen below 1.2, and the population is aging at an accelerating pace. Institutional rigidity has not protected the traditional family; instead, it has hastened its disappearance.

Taiwan's situation is similar to Japan's. Although it has passed a same-sex marriage act, the overall marriage and family system remains quite traditional. In the face of rapidly changing socioeconomic conditions, the pace of institutional adjustment has been too slow.^[22]

V. Future Institutional Adjustments: Some Reflections

Recognizing Diverse Forms of Partnership

Since modern people have diverse needs for partnership, institutions should offer diverse options. In addition to traditional marriage, possibilities include:

• Civil unions: Similar to France's PACS, offering some marital rights but easier to dissolve.
• Registered cohabitation: Allowing long-term cohabiting partners to register and receive certain legal protections.
• Cohabitation agreements: Allowing partners to contractually define the scope of their rights and obligations, providing maximum flexibility.

These options are not meant to "replace" marriage but to "supplement" it. Those who want traditional marriage can still choose it; those who do not have other options. The key is to make institutions adapt to people's needs rather than forcing people to adapt to institutions.^[23]

Reducing the Economic Burden of Marriage and Childbearing

Many people do not "refuse" to marry or have children; they simply "cannot afford" to. High housing prices, steep child-rearing costs, and the difficulty of balancing work and family are real barriers that make marriage and childbearing a "luxury."^[24]

Policy can begin by alleviating these burdens: increasing the supply of affordable housing, expanding childcare services, extending parental leave with higher benefits, and improving workplace support for caregivers. These policies do not "encourage" marriage and childbearing; they "remove" the barriers, enabling those who wish to marry and have children to fulfill their aspirations.

Rethinking the Definition of "Family"

Traditional social policy assumes the "nuclear family" (a married couple with children) as its default target. But real-life family forms are increasingly diverse: single-parent families, blended families, same-sex families, grandparent-headed families, and "chosen families" without blood ties. Policy should support all arrangements that fulfill caregiving functions, not just specific family forms.^[25]

This also means rethinking the legal implications of "kinship." Under traditional systems, many rights and obligations (such as visitation rights, medical decision-making authority, and inheritance rights) are tied to marriage or blood relations. But if people choose different partnership and caregiving arrangements, how should these rights and obligations be allocated? This requires a fundamental updating of legal frameworks.

Destigmatizing Singlehood and Non-Marriage

Finally, and most fundamentally, there must be a shift in social attitudes. Choosing to remain single or unmarried should not be seen as "failure," "selfishness," or "abnormality." It is a rational choice made by modern individuals under existing conditions and deserves respect.^[26]

This is not to deny the value of marriage. For those who want it, marriage can still be a wonderful institution. It is to acknowledge that different people have different needs, and different ways of life can all constitute "a good life." When society stops stigmatizing and pressuring single people, individuals can more freely choose whether to marry, rather than being forced into or away from marriage.

VI. The Long Arc of History: Lessons from Institutional Evolution

The Institution of Marriage Has Always Been Evolving

Looking back at history, the institution of marriage has never been static. Polygyny, polyandry, arranged marriages before birth, parental matchmaking, dowries and bride prices, prohibitions on divorce: all of these once-taken-for-granted arrangements have undergone dramatic changes across different eras and societies.^[27]

Nineteenth-century reformers fought for married women's property rights (previously, a wife's property automatically became her husband's). Early twentieth-century reformers fought for no-fault divorce (previously, one had to prove the other party was at fault to obtain a divorce). Late twentieth-century reformers fought for same-sex marriage. Every reform was fiercely opposed by conservatives and predicted to lead to "family breakdown" or "social collapse," yet society did not collapse. It simply became more inclusive.

The challenges we face today, including rising rates of non-marriage, declining fertility, and the diversification of family forms, similarly demand institutional adaptation. Clinging to past institutional arrangements will not make people re-embrace the traditional family; it will only widen the gap between institutions and reality, leaving more people outside institutional protection.

The Purpose of Institutions Is to Serve People, Not the Other Way Around

Institutional analysis in economics tells us that institutions are tools designed to solve problems. When the problems change, the tools should change as well. The institution of marriage once effectively solved the economic, security, and inheritance challenges of agrarian society, but these problems now have other solutions in modern society.^[28]

This is not to say that marriage is "no longer needed." For many people, marriage remains a desired and meaningful choice. It is to say that marriage is "no longer essential": it has shifted from a necessary condition for survival to an optional element of life. This transformation is not "decline" but "liberation." When people can freely choose whether to marry, those who do are more likely to truly want marriage rather than being compelled to accept it.

Faced with this transformation, society has two choices: one is to try to reverse the tide, using moral persuasion, economic incentives, and social pressure to push people back toward traditional marriage; the other is to go with the current, adjusting institutions to adapt to the new reality while ensuring that everyone, whether married or not, receives basic security and respect. Historical experience suggests the second path is more likely to succeed.

Conclusion: From "Institution" to "Choice"

The growing number of young people choosing not to marry is a phenomenon that calls for understanding rather than condemnation. From an economic perspective, it is the inevitable result of structural changes, including women's economic independence, the establishment of social safety nets, and the rise of individualism. The traditional "sources of efficiency" in marriage, such as specialization, risk sharing, and social security, now have alternative solutions in modern society.

This does not mean that marriage has lost all value. Intimate relationships, emotional support, shared growth, and raising the next generation remain goals that many people pursue, and marriage can be one way to achieve them. But it is no longer the only way, nor should it be imposed as the only way.

The wisdom of institutions lies in offering diverse options for diverse human needs, rather than forcing everyone into a single mold. When marriage transforms from an "institution" into a "choice," when both marrying and not marrying can be seen as "normal" and "good" options, people can more freely pursue their own happiness, whether or not that happiness includes marriage.