How do marital status, work effort, and wage rates interact?
- 524 Downloads
How marital status interacts with men’s earnings is an important analytic and policy issue, especially in the context of debates in the United States over programs that encourage healthy marriage. This paper generates new findings about the earnings-marriage relationship by estimating the linkages among flows into and out of marriage, work effort, and wage rates. The estimates are based on National Longitudinal Survey of Youth panel data, covering 23 years of marital and labor market outcomes, and control for unobserved heterogeneity. We estimate marriage effects on hours worked (our proxy for work effort) and on wage rates for all men and for black and low-skilled men separately. The estimates reveal that entering marriage raises hours worked quickly and substantially but that marriage’s effect on wage rates takes place more slowly while men continue in marriage. Together, the stimulus to hours worked and wage rates generates an 18%–19% increase in earnings, with about one-third to one-half of the marriage earnings premium attributable to higher work effort. At the same time, higher wage rates and hours worked encourage men to marry and to stay married. Thus, being married and having high earnings reinforce each other over time.
KeywordsOrdinary Little Square Wage Rate Unobserved Heterogeneity Work Effort Wage Premium
Unable to display preview. Download preview PDF.
- Ahituv, A. and R. Lerman. 2005. “Job Turnover, Wage Rates, and Marital Stability: How Are They Related?” IZA Discussion Paper No. 1470. Institute for the Study of Labor, Bonn, Germany.Google Scholar
- Chun, H. and I. Lee. 2001. “Why Do Married Men Earn More: Productivity or Marriage Selection?” Economic Inquiry 39(2):307–19.Google Scholar
- Daniel, K. 1995. “The Marriage Premium.” Pp. 113–25 in The New Economics of Human Behavior, edited by M. Tommasi and K. Ierulli. Cambridge, England: Cambridge University Press.Google Scholar
- Ellwood, D. and C. Jencks. 2004. “The Spread of Single-Parent Families in the United States Since 1960.” Pp. 25–65 in The Future of the Family, edited by D.P. Moynihan, T. Smeeding, and L. Rainwater. New York: Russell Sage.Google Scholar
- Freeman, R. and J. Waldfogel. 1998. “Does Child Support Enforcement Policy Affect Male Labor Supply?” Pp. 94–127 in Fathers Under Fire: The Revolution in Child Support Enforcement, edited by I. Garfinkel, S.S. McLanahan, D.R. Meyer, and J.A. Seltzer. New York: Russell Sage Foundation.Google Scholar
- Goldin, C. 1990. Understanding the Gender Gap: An Economic History of American Women. New York: Oxford University Press.Google Scholar
- Lerman, R. 2002. “Marriage and the Economic Well-Being of Families With Children: A Review of the Literature.” Report. Urban Institute, Washington, DC. Available online at http://www.urban. org/url.cfm?ID=410541Google Scholar
- The New York Times, editorial. 2004. “Heartless Marriage Plans.” January 17, p. A14.Google Scholar
- Oppenheimer, V.K. 2003. “Cohabiting and Marriage During Young Men’s Career Development Process.” Demography 40:127–49.Google Scholar
- Parsons, D. 1977. “Health, Family Structure, and Labor Supply.” American Economic Review 67:703–12.Google Scholar
- Ribar, D. 2004. “What Do Social Scientists Know About the Benefits of Marriage? A Review of Quantitative Methodologies.” IZA Discussion Paper 998. Institute for the Study of Labor, Bonn, Germany.Google Scholar
- U.S. Bureau of the Census. 1994. City-County Data Book: 2000. Washington, DC: U.S. Government Printing Office.Google Scholar
- U.S. Bureau of Economic Analysis. 2006. Regional Economic Accounts. Available online at http:// www.bea.gov/bea/regional/reisGoogle Scholar
- U.S. Bureau of Labor Statistics. 2007. Local Area Unemployment Statistics. Available online at http://www.bls.gov.lauGoogle Scholar
- Waite, L.J. and M. Gallagher. 2000. The Case for Marriage. New York: Doubleday.Google Scholar
- Wilson, C. and A. Oswald. 2005. “How Does Marriage Affect Physical and Psychological Health? A Survey of the Longitudinal Evidence.” IZA Discussion Paper 1619. Institute for the Study of Labor, Bonn, Germany.Google Scholar
- Wilson, W.J. 1987. The Truly Disadvantaged. Chicago: University of Chicago Press.Google Scholar