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Review of Economics of the Household

, Volume 9, Issue 2, pp 221–249 | Cite as

Job turnover, wage rates, and marital stability: How are they related?

  • Avner Ahituv
  • Robert I. LermanEmail author
Article

Abstract

This study examines the interplay between job stability, wage rates, and marital stability. We use a Dynamic Selection Control model in which young men make sequential choices about work and family and estimate the model using an approach that takes account of self-selection, simultaneity and unobserved heterogeneity. The results quantify how job stability affects wage rates, how both affect marital status, and how marital status affects earnings and job stability. The study reveals robust evidence that job changes lower wages and the likelihood of getting married and remaining married. At the same time, marriage raises wage rates and job stability. To project the sequential effects linking job change, marital status, and earnings, we simulate the impacts of shocks that raise preferences for marriage and that increase education. Feedback effects cause the simulated wage gains from marriage to cumulate over time, indicating that long-run marriage wage premiums exceed conventional short-run estimates.

Keywords

Marriage and marital dissolution Job turnover Wage rates Panel data 

JEL Specification

C15 C33 J12 J31 J63 

Notes

Acknowledgments

The authors thank the National Institute for Child Health and Human Development (NICHD) for financial support for this research grant (RO 3 HD043994-01) to the Urban Institute. We appreciate the useful comments provided by anonymous referees, by the editor, and by seminar participants in the European Summer Symposium in Labor Economics (ESSLE), European Association of Labor Economics (EALE), the University of Haifa and Tel-Aviv University.

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Carmel Academic CenterHaifaIsrael
  2. 2.American University, Urban Institute, and IZAWashingtonUSA

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