Job Displacement, Remarriage, and Marital Sorting (new version, August 2025)
joint with Hanno Foerster and Tim Obermeier.
Older versions available as IZA DP No. 17335, CESifo WP No. 11387, CEP DP No. 2045, September 2024.
Presented at (selection): NBER SI (The Micro and Macro Perspectives of the Aggregate Labor Market), BSE Summer Forum (Income Dynamics and the Family), SED (Minneapolis), University of Copenhagen, UNC Chapel Hill, Western University, KU Leuven
Abstract
We investigate how job displacement affects whom men marry and study implications for marriage market matching theory. Leveraging quasi-experimental variation from Danish establishment closures, we show that job displacement leads men to break up if matched with low-earning women and to re-match with higher earning women. We use a general search and matching model of the marriage market to derive several implications of our empirical findings: (i) husbands' and wives' incomes are substitutes rather than complements in the marriage market; (ii) our findings are hard to reconcile with one-dimensional matching but are consistent with multidimensional matching; (iii) a substantial part of the cross-sectional correlation between spouses’ incomes arises spuriously from sorting on unobserved characteristics. We highlight the quantitative importance of our findings by simulating how patterns of marital sorting either amplify or dampen the transmission of individual-level inequality to between-household inequality.
Educational Ambition, Marital Sorting, and Inequality (March 2025)
R&R, Journal of Labor Economics (second round)
joint with Frederik Almar, Benjamin Friedrich, Ana Reynoso, and Rune Vejlin.
Also available as NBER WP No 33683 and IZA DP No. 17814, March 2025.
Previously circulated under the title "Marital Sorting and Inequality: How Educational Categorization Matters", IZA DP No. 15912 and CESifo WP No. 10265, January 2023.
Media coverage: Weekendavisen (17/3/2023, in Danish), Interview with Frederik Almar on Dansk Radio P1 (20/3/2023, from 41:25, in Danish), Kellogg Insight (1/4/2023), Frankfurter Allgemeine Sonntagszeitung (14/1/2024, in German), New York Times (7/2/2024, in English), Weekendavisen (11/4/2025, in Danish).
Presented at (selection): University of Michigan, Yale University, ASSA meetings (San Antonio), BSE Summer Forum (Income Dynamics and the Family), Workshop on Labor Supply and Inequality within Families (University of Copenhagen)
Abstract
This paper revisits the link between education-based marriage market sorting and income inequality. Leveraging Danish administrative data, we develop a novel categorization of “ambition types” that is based on starting wages and wage growth trajectories associated with detailed educational programs. We find a substantial increase in assortative matching by educational ambition over time, and the marriage market explains more than 40% of increasing inequality since 1980. In contrast, sorting trends are flat with the commonly-used educational level categorization. We conclude that the mapping from education to types matters crucially for conclusions about how education-based marriage market sorting contributes to rising income inequality.
Families’ Career Investments and Firms’ Promotion Decisions (January 2025)
[Paper] [Online Appendix]
joint with Frederik Almar, Benjamin Friedrich, Ana Reynoso, and Rune Vejlin.
Also available as NBER WP No. 33438, IZA DP No. 17653, and CESifo WP No. 11659, January 2025.
Presented at (selection): Stanford University, Yale University (Cowles Foundation conference), University of Wisconsin - Madison, Northwestern Kellogg, University of Michigan, Western University, US Census Bureau, UCLA, University of Mannheim, Columbia University, Arizona State University, ASSA meetings (San Antonio), Southern Economic Association (New Orleans), LMU Munich. Binghamton SUNY
Abstract
This paper studies how family and firm investments interact to explain gender gaps in career achievement. Using Danish administrative data, we first document novel evidence of this interaction through a “spousal effect” on firm-side career investments. This effect is accounted for by family labor supply choices that shape worker characteristics, which then influence firms’ training and promotion decisions. Our main theoretical contribution is to develop a quantitative life cycle model that captures these family-firm interactions through household formation, families’ joint career and fertility choices, and firms’ managerial training and promotion decisions. We then use the estimated model to show that the interaction between families and firms in the joint equilibrium of labor and marriage markets is important when evaluating firm-side and family-side policy interventions. We find that gender-equal parental leave and a managerial quota can both improve gender equality, but leave implies costly skill depreciation, whereas the quota raises aggregate welfare, in part through adjustments in marital sorting towards families that invest in women.
Joint Labor Search and the Taxation of Couples (March 2024)
First draft coming soon.
joint with Piotr Denderski, Leo Kaas, and Nawid Siassi.
Presented at (selection): European Search and Matching Conference 2025 (poster and falshtalk), Vilnius, Third DC Search and Matching Workshop (poster), Goethe University Frankfurt, German Economic Association (Verein für Socialpolitik)
Abstract
In many countries, income is taxed at the household level with a progressive tax schedule. This paper analyzes the impact of joint progressive taxation for employment and wages of dual-earner households in the presence of labor market frictions. We develop a directed search model in which firms offer wage contracts to workers in single and couple households, anticipating that workers may quit into other jobs or non-employment in response to spousal income and the tax system. The model is calibrated to replicate job-finding, job-to-job transition, layoff and quit rates of the U.S. labor market, and a progressive joint tax schedule and UI benefits at the individual level. When comparing the benchmark economy to a counterfactual scenario with individual taxation, we find that replacing the tax rules for couples with those for singles reduces the share of non-employed workers by one-tenth. Furthermore, it increases wages by about 6 percent.
Marriage and Divorce under Labor Market Uncertainty (March 2023)
joint with Christian Holzner.
Media Coverage: Frankfurter Allgemeine Sonntagszeitung (14/1/2024, in German)
Presented at (selection): NBER SI (The Micro and Macro Perspectives of the Aggregate Labor Market), BSE Summer Forum (Income Dynamics and the Family), University of Mannheim, Helsinki GSE, Nordic Summer Symposium in Macroeconomics and Finance
Abstract
Married women's greater allocation of time towards household chores and childcare suggests that an increase in their labor supply may result in reduced marital surplus and stability. This mechanism can explain persistent gender gaps in labor supply if the potential reduction is considered in decisions about reservation wages and job search efforts. An implication is that divorces may be caused by transitions into employment. This paper analyzes these ``labor market divorces'' in a novel model of simultaneous search in labor and marriage markets. Labor market search intensity choices depend on marital status and the partner's type. The model matches key trends in German household survey data: declining marriage rates, increasing employment rates of married women, and a reduction of married women's domestic time inputs. Our laboratory to quantify the role of labor market divorces is a period of rapid employment growth in Germany that started in the mid-2000s. This development in the labor market was not neutral with respect to marriage. Although more married women entering employment led to more divorces, the decrease in divorces caused by job loss among married men was greater, resulting in a net decrease in the overall divorce rate.