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

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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.

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Notes

  1. See, for example, Manning and Smock (1995), Call and Teachman (1996), Presser (2000), Smock and Manning (1997), Teachman, Call, and Carver (1994), and Weiss and Willis (1997).

  2. One exception is a recent paper by Gould (2003), which hypothesizes that men may invest in schooling and work in order to improve their marriage prospects. Another is Eckert-Jaffe and Solaz (2001).

  3. We conducted robustness tests and found the results were similar with and without the 366 individuals who completed less than 10 interviews.

  4. Tabulations on the reasons for job change for the nonmissing cases are available on request.

  5. Because these results yielded similar results to our main model, we do not report them, but they are available on request.

  6. If the increased attractiveness of men raises their expectations of partners (as in their reservation wage in the case of job search), it is possible that the higher wage will not increase entry into marriage (Burdett and Coles 1999).

  7. The coefficients across marital statuses k = 2,4,6 are not constrained to be the same.

  8. In principle, the county divorce rate could affect (indirectly) job stability. In fact, county divorce rates are not correlated with job turnover or wage rates. The simple correlation between job change and county divorce rate is 0.0041. The simple correlation between marital changes and county divorce rate is 0.0787.

  9. A reanalysis of Gray’s results shows that extending his model to many years raises the wage premium significantly (Ahituv and Lerman 2007).

  10. For a summary of the activities taking place under this “Healthy Marriage Initiative” see the following website: http://www.acf.dhhs.gov/healthymarriage/index.html.

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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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Authors and Affiliations

  1. Carmel Academic Center, Haifa, Israel

    Avner Ahituv

  2. American University, Urban Institute, and IZA, 2100 M Street, NW, Washington, DC, 20037, USA

    Robert I. Lerman

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  1. Avner Ahituv
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  2. Robert I. Lerman
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Correspondence to Robert I. Lerman.

Appendix

Appendix

See Table 6.

Table 6 Descriptions of Variables
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Ahituv, A., Lerman, R.I. Job turnover, wage rates, and marital stability: How are they related?. Rev Econ Household 9, 221–249 (2011). https://doi.org/10.1007/s11150-010-9101-6

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