Job Market Paper

Assortative Mating and Inequality

This paper studies the evolution of assortative mating based on the permanent wage (the individual-specific component of wage) in the U.S., its role in the increase in family wage inequality, and the factors behind this evolution. I first document a remarkable trend in the assortative mating, as measured by the permanent-wage correlation of couples, from 0.3 for families formed in the late 1960s to 0.52 for families formed in the late 1980s. I show that this trend accounts for more than one-third of the increase in family wage inequality across these family cohorts. I then argue that the increased marriage age across these cohorts contributed to the assortative mating and thus to the rising inequality. Individuals face a large degree of uncertainty about their permanent wages early in their careers. If they marry early, as most individuals in the late 1960s did, this uncertainty leads to weak marital sorting along permanent wage levels. But when marriage is delayed, as in the late 1980s, the sorting becomes stronger as individuals are more able to predict their likely future wages. After providing reduced-form evidence on the impact of marriage age, I build and estimate a marriage model with wage uncertainty, and show that the increase in marriage age can explain almost 80% of the increase in the assortative mating. 

Other Papers 

The Transmission of Monetary Policy through Corporate Debt Maturity [In Progress]

This paper studies the impact of corporate debt maturity on the effectiveness of monetary policy by using a high-frequency event-study approach with Compustat/CRSP data. I find that decreased debt maturity—all else held constant—leads to a greater stock-price and investment response to monetary policy shocks. I then show that the fluctuations in corporate debt maturity over time has a sizable impact on the transmission of monetary policy.

[with Ahmet Alkan, 2014]

Pairing Games or Markets that we study here are a generalization of the assignment game where players are not a priori partitioned into two sides and utility realizations are NTU. We identify a necessary and sufficient condition for the nonemptiness of the core, equivalently the set of competitive equilibria. We define semistable and pseudostable allocations and show that there exists a semistable and a pseudostable allocation when the core is empty. We also show that pseudostable allocations belong to the Bargaining Set of a Pairing Game. Our approach is constructive and utilizes solitary-minimal matchings that we introduce. We give a Market Procedure that reaches the Equilibrium Set and show several properties that the Equilibrium Set has.

The Role of Extended Family in Intergenerational Income Mobility [In Progress]