Three Essays on Marriage, Housing and Incomplete Markets

This dissertation focuses on labor economics and macroeconomics.;Chapter 1 explains the savings rate puzzle in China from the marriage market perspective. Since 2000, China's age profile of the savings rate exhibits a downward-sloping pattern with younger people having higher savings rates than the middle-aged. I explain such a puzzle using the competitive saving motive. That is, single men save in a competitive manner in order to improve their ranking in the marriage market, and this competition gets fiercer with an unbalanced gender ratio. I develop a life-cycle model with a marriage market and calibrate it to the Chinese economy. This model generates a similar downward-sloping age-savings rate profile as observed in the data. Another finding is that the adjustment in marriage age reduces the response of the savings rate to the gender ratio increase by half.;Chapter 2 studies the effect of market incompleteness on business cycles. We find that even without a collateral constraint, market incompleteness by itself plays a quantitatively significant role in the amplified and asymmetric responses in output and housing price to exogenous shocks.;In Chapter 3, I explain why in recent years women with high socioeconomic status in China find it increasingly difficult to find a spouse even with a steadily increasing gender ratio (number of men per woman) in the premarital cohort. In a bilateral search model with positively assortative matching, as the gender ratio increases, women of high quality set up higher requirements for their future spouses while men of high quality become less demanding. I show how this results in the failure of log-concavity of the stationary distributions among singles which may be the reason why high-quality women have a larger chance of being unmatched even though the marriage market conditions favor women in general.