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The changing wage distribution and the decline of marriage

Wednesday 11 November 2020, 1.00PM to 2.00 pm

Speaker(s): Edoardo Ciscato (KU Lueven)

Abstract: In the last fifty years, the share of adults living with a partner has declined in the U.S. In this paper, we show that changes in wage structure can partly explain this decline. For this purpose, we build an equilibrium model of the marriage market characterized by search frictions, endogenous divorce, aging, and wage mobility. In the model, the gains from joint household production and search frictions are the key determinants of mating patterns. We discuss their identification and estimation with longitudinal data on couple formation and dissolution. We take the model to the data and show that wages are weak substitutes in household production and, particularly in the 1970s, there exist gender asymmetries: as a result, couples reliant on a male “breadwinner” gain the most from marriage. We also show that search frictions are weak among likes: meetings on marriage markets are assortative with respect to age, education and wages. The closing gender wage gap makes men fit for the role of “breadwinners” scarce, leading to a decrease in “specialized” couples and a surge in less stable “egalitarian” couples. The new marriage market equilibrium is characterized by a higher marital turnover, a lower share of matched individuals and a higher correlation between partners' wages.

 

Location: ZOOM

Admission: All welcome