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Title: Money and Marriage: Implications of Wage Inequality on Marriage Outcomes

Citation Type: Miscellaneous

Publication Year: 2008

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Abstract: This paper explains a stylized fact about the correlation between rising wage inequalityand declining marriage rates. A two-sided matching model is developed toexplore how this interaction occurs. The model features a steady state equilibrium inwhich the whole marriage market is divided into distinct groups and only people inthe same group will marry each other. Using IPUMS data 1 from 1970 to 2000, ourestimates show that in past decades the U.S. marriage market experienced a structuralchange. The higher matching efficiency and declining elasticity of matching suggestthat the marriage market today provides more chance to meet and better gender equity,though higher arrival rates also raise the outside option of getting married. Additionally,the results obtained reveal that wage inequality accounts for over 38% of thedecline in marriage rate, which is underestimated in [Gould and Paserman(2003)].

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Authors: Liu, Jing

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Data Collections: IPUMS USA

Topics: Family and Marriage, Poverty and Welfare

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