Research

JOB MARKET PAPER

Marriage, Divorce and Wage Uncertainty along the Life-Cycle

Status: updated draft available on request

June 2018 version available in the HCEO Working Paper Series (2018-046)

The American family underwent important transformations in the last decades. Mating patterns changed, college graduates and high earners marry with each other more and more frequently. On the other hand, those at the bottom of the wage and schooling distributions have become more and more likely to stay single, and, once married or cohabiting, more likely to break up. This increasing gap in family achievements has important implications for both income and consumption inequalities, as well as intergenerational mobility. In this paper, I aim to quantify the importance of the marriage market as a channel of inequality, both at household and individual level. I build on the matching literature and set up a model of marriage, divorce and remarriage along the life-cycle in order to reproduce the afore-mentioned aggregate trends and understand the underlying drivers. In the model, risk-averse agents get married in order to benefit from joint public good expenditure, but economic gains from marriage are volatile due to labor market shocks. I show that the underlying structure of preferences and of the meeting technology are identified with matched data on the distribution of couples' and singles' traits, jointly with data on newlyweds and divorcees. I propose an estimation method based on indirect inference and estimate the model with CPS and PSID data.

WORKING PAPERS

The Role of Evolving Marital Preferences in Growing Income Inequality (with Simon Weber)

Status: R&R (2nd round) at Journal of Population Economics

Available on SSRN

In this paper, we describe mating patterns in the United States from 1964 to 2017 and measure the impact of changes in marital preferences on between-household income inequality. We rely on the recent literature on the econometrics of matching models to estimate complementarity parameters of the household production function. Our structural approach allows to measure sorting on multiple dimensions and to effectively disentangle changes in marital preferences and in demographics, addressing concerns that affect results from existing literature. We answer the following questions: has assortativeness increased over time? Along which dimensions? To which extent the shifts in marital preferences can explain inequality trends? We find that, after controlling for other observables, assortative mating on education has become stronger. Moreover, if mating patterns had not changed since 1971, the 2017 Gini coefficient between married households would be lower by 6%. We conclude that about 20% of the increase in between-household inequality is due to changes in marital preferences. Increased assortativeness on education positively contributes to the inequality rise, but only modestly.

Like Attract Like? A Structural Comparison of Homogamy Across Same-Sex and Different-Sex Households (with Alfred Galichon and Marion Goussé)

Status: R&R (2nd round) at Journal of Political Economy

Available on SSRN

In this paper, we extend Gary Becker's empirical analysis of the marriage market to same-sex couples. Beckers's theory rationalizes the well-known phenomenon of homogamy among heterosexual couples: individuals mate with their likes because many characteristics, such as education, consumption behaviour, desire to nurture children, religion, etc., exhibit strong complementarities in the household production function. However, because of asymmetries in the distributions of male and female characteristics, men and women may need to marry "up" or "down" according to the relative shortage of their characteristics among the populations of men and women. Yet, among homosexual couples, this limit does not exist as partners are drawn from the same population, and thus the theory of assortative mating would boldly predict that individuals will choose a partner with nearly identical characteristics. Empirical evidence suggests a very different picture: a robust stylized fact is that the correlation of characteristics is in fact weaker among the homosexual couples. In this paper, we build an equilibrium model of the same-sex marriage market which allows for straightforward identification of the gains to marriage. We estimate the model with 2008-2012 ACS data on California and show that positive assortative mating is weaker for homosexuals than for heterosexuals with respect to age and race. Yet, contrarily to previous empirical findings, our results suggest that postitive assortative mating with respect to education is stronger on the same-sex marriage market. As regards labor market outcomes, such as hourly wages and working hours, we find that the process of specialization within the household mainly applies to heterosexual couples.

WORK IN PROGRESS

The Hong Kong Marriage Market in the Past Three Decades (with So Yoon Ahn and Danyan Zha)

Since the handover of Hong Kong to China in 1997, cross-border marriages between Hong Kong and mainland China became more common. In 2006, more than 45% marriages registered in Hong Kong were between Hong Kong and Mainland China, where most of them were Hong-Kong grooms with Mainland Chinese brides. Interestingly, in recent years, we also observe the opposite type of pairs, cross-border marriages between Hong Kong brides and Mainland Chinese grooms. Since the handover of Hong Kong, the characteristics of the Chinese population on the Mainland have greatly changed, as demonstrated by trends of population growth, sex ratio, and schooling. Our research uses recently developed structural methods in the estimation of matching models in order to rationalize the patterns of cross-border marriages . Thanks to this approach, we aim to recover the evolution of the cost of cross-border marriages over time, to analyze the comparative statics with respect to characteristic distribution change, and to discuss the implications of immigration policies. In particular, we are interested in the spillovers of a more lenient immigration policy toward skilled individuals into the Hong Kong marriage market.