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Cohabitation History, Marriage, and Wealth Accumulation

Abstract

This study extends research on the relationship between wealth accumulation and union experiences, such as marriage and cohabitation. Using data from the National Longitudinal Survey of Youth 1979, we explore the wealth trajectories of married individuals in light of their premarital cohabitation histories. Over time, marriage positively correlates with wealth accumulation. Most married persons with a premarital cohabitation history have wealth trajectories that are indistinguishable from those without cohabitation experience, with one exception: individuals who marry their one and only cohabiting partner experience a wealth premium that is twice as large as that for married individuals who never cohabited prior to marrying. Results remain robust over time despite cohabiters’ selection out of marriage, yet vary by race/ethnicity. We conclude that relationship history may shape long-term wealth accumulation, and contrary to existing literature, individuals who marry their only cohabiting partners experience a beneficial marital outcome. It is therefore important to understand the diversity of cohabitation experiences among the married.

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Fig. 1

Notes

  1. 1.

    NLSY79 did not collect wealth data until 1985. Compared with post-1985 marriages, respondents in pre-1985 marriages grew up in less-educated and lower-income households. At marriage, they were younger, had less cohabitation experience, and were less likely to have had a nonmarital birth. They also had lower incomes and were less likely to own a home or to have more than a high school education. Excluding these marriages likely biases results upward because it omits marriages with lower wealth potential.

  2. 2.

    Missing data reduced the sample size slightly. Experiments with multiple imputation did not change the results.

  3. 3.

    White refers to non-Hispanic white; black, to non-Hispanic black.

  4. 4.

    We adjust for inflation to 2004 dollars, using the Consumer Price Index.

  5. 5.

    In a supplemental analysis of the directly married and spousal cohabiters, we examined respondent’s age at union formation rather than age at marriage to better account for cohabiters’ longer coresidence with their partner. Results were equivalent, so we present results using age at marriage with the full sample.

  6. 6.

    Results were robust when we substituted respondent’s education for the household-level measure.

  7. 7.

    We also interacted gender with cohabitation histories and marital duration because of gendered differences in wealth. None of the interactions was significant. For parsimony, we excluded them from the final models.

  8. 8.

    Cohabitation also varies among ethnicities. Puerto Ricans are more accepting of cohabitation and cohabit more often than Mexican Americans (Oropesa 1996). In supplemental analyses, we examined Mexicans and Mexican Americans, the largest Hispanic groups in the data. Results remained unchanged from the pooled Hispanic model.

  9. 9.

    In additional analyses, we included the square of marital duration for blacks and Hispanics. These terms were not significant, so we estimated a linear specification.

  10. 10.

    We include these cohabitation histories because their wealth patterns significantly differ from their respective directly married peers. For this reason, we include only black directly married persons. The figure does account for the curvilinear results of spousal cohabitation among whites. Because the squared term is small, the curvature is not particularly pronounced during the first 10 years of marriage.

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Acknowledgments

For their advice and time spent reviewing this article, we thank Kenneth Land, the anonymous reviewers of Demography, Zhenchao Qian, Bob Kaufman, Randy Olsen, Randy Hodson, Jamie Lynch, and Adrianne Frech. We would also like to acknowledge the helpful comments of Wending Manning, Pamela Smock, and Kelly Raley from the session on cohabitation during the 2009 annual meetings of the Population Association of America in Detroit, MI, where an earlier version of this research was presented.

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Correspondence to Jonathan Vespa.

Appendix

Appendix

Table 5

Table 5 Means and standard deviations for control variables, NLSY79 (N = 4,205)

Table 6

Table 6 Control variable growth curve parameter estimates of cohabitation history on marital wealth accumulation (logged dollars), NLSY79 (N = 4,205)

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Vespa, J., Painter, M.A. Cohabitation History, Marriage, and Wealth Accumulation. Demography 48, 983–1004 (2011). https://doi.org/10.1007/s13524-011-0043-2

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Keywords

  • Marriage
  • Cohabitation
  • Race/ethnicity
  • Wealth
  • Multilevel growth curve models