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In families that end up divorcing or separating, the spouses invest less in their children during marriage. In addition, investment in these children declines starting about two years prior to the divorce itself, primarily due to lower investments by fathers. This new finding suggests that the anticipation of divorce may be detrimental to children through its impact on parental investment. In order to understand these results, in the first chapter of this dissertation I develop a model of a married couple learning about their match quality and engaging in match-specific investment in their children. The model shows that it is match quality, and not merely divorce, that affects children. I use two implications of the model to establish that the prospect of divorce impacts home investment in children during marriage. First, by using variation over time in the probability of divorce within a given marriage, I show that the probability of divorce is negatively related to parental investment in children during marriage. Second, I use information on marital conflict to show that the home investment levels of families near the margin of divorce respond to differences in the costs and benefits of divorce whereas in families far from the margin of divorce they do not. This finding implies that it is the possibility of divorce that is driving some of the differences in investment level s between families. My results establish a new pathway by which divorce may harm children: the anticipation of divorce decreases investment in children during marriage. This effect can explain a small but significant portion of the gap in investment levels between families that divorce and those that do not; roughly the same amount as is explained by the mother's cognitive ability or father's education. A standard collective model of the household with a household public good shows how a change in bargaining power within the household can result in a change in the demand for child quality. The marriage market sex ratio is an important driver of bargaining power in the household.

In the second chapter of this dissertation I establish that the marriage market sex ratio, by affecting the balance of power in the household, affects the allocation of household resources to children. The problem with credibly estimating this relationship is the potential endogeneity of the sex ratio. To account for this endogeneity, I use variation induced by two sources: (i) the "Baby Boom" in the United States, and (ii) immigration flows to the United States in the early part of the 20th century. Using data from the National Longitudinal Survey of Youth 1979 - Children Sample (NLSY79-CS) I find that mothers who faced higher sex ratios (i.e. a high relative supply of men) due to the state and year of their birth have higher household investment in children. In these families, women also have lower labor supply. In addition, using data from the National Longitudinal Survey - Mature Women cohort, the General Social Survey, and the 1980 U.S. Census, I show that the daughters of second generation immigrants to the U.S. who faced higher marriage market sex ratios have more years of completed education.