This dissertation studies the impact of governmental policies on firm and family decisions. Thefirst chapter examines the effects of minimum wage increases on firm production decisions for small to large firms in the manufacturing and retail sectors, extending beyond the traditional focus on aggregate employment effects. Using restricted firm- and establishment-level data from the US Census, we use a stacking and synthetic difference-in-differences approach to estimate the average treatment on the treated resulting from minimum wage increases on employment and other sec- ondary production-related measures. We reveal significant heterogeneity in responses across firm size, finding disemployment effects among smaller firms, and positive employment effects among larger firms. Focusing on retail and manufacturing sectors, we observe that minimum wage in- creases prompt higher investment-labor ratios and automation in large manufacturing firms and lower investment-labor ratios for large retail firms. We characterize a dynamic model of firm entry and exit with an instilled monopsonistic competition setting to match the short-run treatment ef- fects and quantitatively determine the short-run and long-run macroeconomic effects of minimum wage increases of varying sizes. We estimate wage markdowns as approximately 9-13% of labor demand. Typical, average increases in the minimum wage slightly decrease aggregate employment responses while a $15 minimum wage elicits a negative impact on aggregate sector employment. The second chapter examines examines the divergence in divorce rates observed since the 1980s, characterized by increasing rates among non-college-educated women and decreasing rates among college-educated women. I document that the divergence can mainly be attributed to spouses with heterogeneous education levels. Despite expectations that rising wages would disproportionately lower the marginal value of marital consumption for college-educated women, this trend points to other underlying factors. Using data from the SIPP, PSID, NCHS, and a newly conducted survey via ResearchMatch, I document the impact of no fault divorce laws for grounds and property on divorce rates by education group. I find that these legal reforms, which began proliferating in the 1970s, can account for most of the divergence by eliminating the requirement to prove fault for divorce and preventing fault from serving as a factor in property division. To determine the impact of incorporating a fault-based pathway in the traditional method of modeling mutual consent on the divorce trends in heterogeneous marriages, I compare the mutual consent regime and unilateral divorce regime in a four-period life cycle model of endogenous marriage and divorce decisions with exogenous wage, education, age at first marriage, and fertility patterns. I find that switching between these two regimes with the proposed mechanisms can explain approximately 37% of the divide among heterogeneous marriages for the 1980 marital cohort.