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For Love and Money? Earnings and Marriage Among Same-Sex Couples

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Abstract

We investigate the earnings effects of marriage among same-sex couples in the United States. Gays and lesbians in the United States have only recently been allowed to enter into legally recognized marriages. As such, we know little about the impact of same-sex marriage on the economic lives of gays and lesbians. We use data from the 2013 to 2017 American Community Survey to show that married gay men experience a 3% marriage earnings premium and lesbian women experience a 6% marriage earnings premium relative to their unmarried cohabiting counterparts. The marriage premium for gay men is smaller than that of heterosexual married men, but the lesbian marriage premium is similar in size to the premium for heterosexual women. In both cases, we show that the marriage premium is larger relative to single gay men and lesbian women in the 2013 to 2017 National Health Interview Surveys. We also find that the marriage premium is more than two times larger among individuals who earn more than their partners, and marriage increases intrahousehold differences in labor market outcomes. This pattern is consistent with a common explanation of the earnings premium experienced by heterosexual men and women: marriage increases investments in relationships that affect patterns of household specialization. Therefore, our results suggest that the effect of marriage on how households organize their time is general and not unique to different-sex households.

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Notes

  1. In addition, limited work suggests that this trend may have led to an earnings premium for gay men (Carpenter and Eppink 2017) and earnings penalty for lesbian women (Martell and Hansen 2017; Martell 2019).

  2. Decompositions of earnings differentials also find that individual characteristics cannot explain differentials gay men experience (Martell 2013a; Berg and Lien 2002).

  3. It is also relevant to note that legalized marriage is also associated with improved health among sexual minorities (Carpenter et al. 2018).

  4. The increased contribution of those with a lower earnings potential may also arise due to marriage increasing the ability of the partner with lower earnings to bargain out of paid labor (Oreffice 2011; Carter and Katz 1997).

  5. Selection of this kind, assortative mating, may be less important for the case at hand. Even though matching patterns among same-sex couples are understudied, patterns of assortative mating appear to be less prominent in same-sex couples. Same-sex couples are less similar in labor market and non-labor market traits than different-sex households (Jepsen and Jepsen 2002).

  6. Note that we refer to these individuals as gay or lesbian even though we do not observe their self-reported sexual identity. For comparability, we supplement our primary analysis with estimates the earnings effect of marriage on the sample of heterosexual men and women. Descriptive statistics for these samples are presented in Table 8.

  7. Results available upon request.

  8. While the General Social Survey has also been utilized to investigate earnings effects of sexual orientation, the very small sample size limits the ability of researchers to analyze subsets of the gay and lesbian sample such as married individuals (Badgett 1995; Martell 2013b)

  9. Carpenter and Eppink (2017) provide a full description of the NHIS. Following (Carpenter and Eppink 2017), we replace top coded incomes in the NHIS with the median of the income distribution above the top code calculated in the ACS. The NHIS topcodes earnings at $120,000 in 2013, $125,000 in 2014, $130,000 in 2015, $133,000 in 2016 and $142,000 in 2017.

  10. All income is adjusted for inflation using the CPI-U. Amounts are reported in 2012 dollars. We calculate hourly wages as annual earnings from wages and salary divided by weeks worked last year (reported in intervals) times weekly hours.

  11. As does Carpenter and Eppink (2017), we utilize sruvey weights provided in the NHIS. However, the use of weights has no material effect on our results. Results available upon request.

  12. Marginal effect calculated as eβ − 1 throughout

  13. This premium is not statistically significant at standard levels. However, the p-value is 0.118, which we interpret as meaningful given the size of the effect and the small sample.

  14. The difference in the size of these estimates appears to be due to the inclusion of single lesbian, gay and bisexual individuals and not our inability to control for state of residence or presence of state legalized same-sex marriage and employment nondiscrimination acts. Our estimates of the marriage premium in the ACS are unaffected when we exclude these controls (results available upon request). We also note that augmenting Eq. 1 with an additional control for individuals who are unmarried but cohabiting with a member of the same-sex in the NHIS data produces estimates of the marriage premium that are twice as large as those in the ACS we show in Table 3. The coefficients on the indicator variables for marriage and cohabiting are statistically insignificant due to the smaller sample size in the NHIS and the collinearity between marriage and cohabitation.

  15. Specifically we stabilize the IPWs IPWs by multiplying them by the unconditional probability of being married \(\omega _{i}=\frac {S_{i}\bar {p}}{p_{i}}+\frac {(1-S_{i})(1-\bar {p})}{1-p_{i}}\). We trim the weights by topcoding them at the 99th percentile.

  16. Similarly, we also rule out the role of time varying unobserved characteristics by showing (see Table 17) that the estimated marriage premiums are robust to the inclusion of lag indicators for one, two and three or more years married. This appraoch is similar to the identification strategy proposed by Aldén et al. (2015). The size of the earnings premium for lesbian women is largely unchanged and remains statistically significant at standard levels. The size of the earnings premium for gay men is largely unchanged but less precisely estimated with p-values of 0.13 (income) and 0.11 (wages).

  17. We exclude the small number of individuals who earn the same amount as their partner.

  18. We calculate the intrahousehold difference in wages as the absolute value of the wages of the household head minus wages of the partner of the household head. Similarly, the differnece in hours worked is the absolute value of hours worked of the household head minus the hours worked of the partner of the household head.

  19. In results available from the authors, we note that contrary to the predictions of employer favoritism, the marriage premium is qualitatively similar (though less precisely estimated) on the very small sub-sample of self-employed workers who would not be subject to favoritism.

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  1. Department of Economics, Bard College, PO Box 5000, Annandale-on-Hudson, NY, 12504, USA

    Michael E. Martell & Peyton Nash

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  1. Michael E. Martell
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Appendix

Appendix

Table 8 Descriptive Statistics For Men and Women in Different-Sex Couples
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Table 9 Descriptive Statistics of Gay Men and Lesbian Women in the National Health Interview Survey
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Table 10 Full Results: Estimates of Marriage Premium among Gay Men
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Table 11 Full Results: Estimates of Marriage Premium among Lesbian Women
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Table 12 Full Results: Estimates of Marriage Premium among Heterosexual Men
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Table 13 Full Results: Estimates of Marriage Premium among Heterosexual Women
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Table 14 Full Results: Estimates of Marriage Premium for Gay Men in the NHIS
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Table 15 Full Results: Estimates of Marriage Premium for Lesbian Women in the NHIS
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Table 16 Full Results: Group Specific Coefficient Estimates for Wage Decompositions
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Table 17 Earnings Effects of Marriage are Robust to Lag Indicators
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Martell, M.E., Nash, P. For Love and Money? Earnings and Marriage Among Same-Sex Couples. J Labor Res 41, 260–294 (2020). https://doi.org/10.1007/s12122-020-09305-4

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