Bankruptcy and Investment: Evidence from Changes in Marital Property Laws in the U.S. South, 1840-1850

Abstract

Wright for comments and suggestions. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

For Richer, for Poorer: Bankers' Liability and Risk-taking in New England, 1867-1880

“…33 National Archives, Records of the OCC (RG 101), Bank examiners' reports, 1864-1901, Box 91. 34 We discuss an extension of the model in which bankers can issue outside equity in Appendix C. 35 Our results hold under certain less restrictive assumptions about the banker's utility function. See W , is held in the wife's name and is protected from any outside claims, provided it has not been invested in the bank.…”

“…A bank funds a certain amount of assets with equity e and deposits d. Equity has double liability. We abstract from any agency conflicts between the bank president and other shareholders, and we assume that the bank president owns all equity e. 34 The banker is risk averse with log utility. 35 He lacks commitment.…”

Women's Liberation as a Financial Innovation

“…551 (1854) in the Supreme Court of New York, in which Justice J. Wright gives a legal overview of the 1848 law. As 11 In a fascinating paper, Koudijs and Salisbury (2016) study how these debt statutes, by preserving some family assets in the case of default, affected risk-taking behavior in the U.S. South. 12 How is it possible for a woman to have separate moveable assets if common law allows the husband to take them upon marriage?…”

“…Indeed, Rosenbloom and Stutes (2008) argues that "[m]any of these individuals were part of larger households, whose assets were likely to be reported as belonging to the head of the household" (p. 148). Koudijs and Salisbury (2016), who study the effects of protecting married women's assets from creditors, also use these data at the household level rather than breaking down the assets between husbands and wives. 16 Moveable property of value less than $100 was not recorded in 1870.…”

“…In a fascinating paper, Koudijs and Salisbury () study how these debt statutes, by preserving some family assets in the case of default, affected risk‐taking behavior in the U.S. South.…”