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Marital Sorting and Parental Wealth

Demography volume 50, pages 51–70 (2013)Cite this article

Abstract

The extent of marital sorting by socioeconomic background has implications for the intergenerational transmission of inequality, the role of marriage as a mechanism for social mobility, and the extent of cross-group interactions within a society. However, studies of assortative mating have disproportionately focused on spouses’ education, rather than their social origins. Using data from the Panel Study of Income Dynamics (PSID), and exploiting the unique genealogical design of the data set, we study the degree to which spouses sort on the basis of parental wealth. We find that the estimated correlation in parental wealth among married spouses, after controlling for race and age, is about .4. Importantly, we show that controlling for spousal education explains only one-quarter of sorting based on parental wealth. We show that our results are robust to accounting for measurement error in spousal reports of parental wealth and for selection into and out of marriage.

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Notes

  1. See Solon (1992), Zimmerman (1992), Mulligan (1997), and Charles and Hurst (2003) for examples. See the review by Solon (1999) for a more extensive discussion.

  2. The PSID elicits responses via “unfolding brackets” for those who did not provide an exact response. Respondents were asked whether their parents’ wealth was greater than or less than $25,000. If they responded greater than $25,000, they were subsequently asked whether it was greater than or less than $100,000. If they initially responded that it was less than $25,000, they were subsequently asked whether it was greater than or less than $1,000.

  3. An exception occurs when one divorced parent is reported to have negative wealth and one positive. Because total wealth is unknown, it is not possible to meaningfully combine reports in this case.

  4. Some assortative mating on the basis of parental wealth may reflect assortative mating on the basis of race, coupled with racial differences in parental wealth (see Oliver and Shapiro 1995; Conley 1999 and Barsky et al. 2002). We perform the analysis in Table 2 separately by race and find strong parental wealth sorting patterns within racial groups (whites and nonwhites).

  5. There are too few interracial couples in the sample to control separately for each spouse’s race. We use the race of the husband, when it is available. Otherwise, we use the race of the wife.

  6. More than 96 % of PSID parents reported positive wealth.

  7. Allowing for full interactions of husbands’ and wives’ education levels does not diminish our TSLS estimates of parental wealth sorting, relative to the estimated coefficients in Panels B and C of Table 6.

  8. All the detailed results, including the specific sample descriptions, can be found in the Online Resource 1.

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Acknowledgments

We thank Daron Acemoglu, Mark Aguiar, Steve Levitt, Bruce Meyer, and Emily Oster, along with seminar participants at the University of Chicago for helpful comments. Charles gratefully acknowledges support from the Searle Freedom Trust. Hurst acknowledges financial support from the University of Chicago’s Graduate School of Business. Killewald acknowledges financial support from the Gerald R. Ford School of Public Policy, Rackham Graduate School, and the Quantitative Methodology Program in the Survey Research Center, all at the University of Michigan. The Panel Study of Income Dynamics is primarily sponsored by the National Science Foundation, the National Institute of Aging, and the National Institute of Child Health and Human Development, and is conducted by the University of Michigan. All authors have contributed equally to the project, and we use the convention of alphabetical listing of author names.

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Authors and Affiliations

  1. Harris School of Public Policy, University of Chicago, 1155 E. 60th Street, Ste. 164, Chicago, IL, 60637, USA

    Kerwin Kofi Charles

  2. Booth School of Business, University of Chicago, Chicago, USA

    Erik Hurst

  3. Department of Sociology, Harvard University, Cambridge, USA

    Alexandra Killewald

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  1. Kerwin Kofi Charles
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  2. Erik Hurst
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  3. Alexandra Killewald
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Correspondence to Kerwin Kofi Charles.

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Charles, K.K., Hurst, E. & Killewald, A. Marital Sorting and Parental Wealth. Demography 50, 51–70 (2013). https://doi.org/10.1007/s13524-012-0144-6

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Keywords

  • Social mobility
  • Marriage
  • Inequality
  • Multigenerational
  • Wealth