On the other hand, if we randomly matched a man whose parents’ wealth was greater than $100,000 with any woman, there would be only a 39 percent chance that he would end up married to a woman whose parents also had more than $100,000 in wealth. Instead, 60 percent of men are married to women whose parents have wealth in the top bracket, and only 7 percent are married to women whose parental wealth is less than $1,000.
It isn’t surprising that parental wealth plays a role in marriage market outcomes, for a variety of reasons. It could just be that people meet their future spouses in their parents’ social circles, or that they have more common interests with those who have similar wealth backgrounds.
What is interesting, though, is that marital sorting over wealth means that the gains from marriage are not equal among people of different socioeconomic groups; wealthy people have far more to gain from marriage than do those with no wealth. This fact might explain why people with higher incomes are more likely to marry than people with low incomes, given that income (and education level) is correlated with parental wealth.
It also suggests that because of the way people choose their spouses, the divide in wealth levels between the rich and the poor will only expand over time. The children of the wealthy will not only inherit their parent’s wealth but also that of their spouse’s parents. The children of the poor will inherit their parent’s debts and the debts of their spouse’s parents. Marital sorting over parental wealth suggests that, over time, wealth will become concentrated in the hands of an increasingly smaller proportion of households.
The final possibility is that, of course, educated women will (and do) choose to remain single rather than marry a man with less education and/or income. In doing so, they won’t have the benefits of marriage that we discussed earlier, but the market can provide much of what they need (sperm banks, for example) and, for many, their income is sufficiently high that they can afford to purchase at least some of the goods and services that marriage might have provided. For many women, that is the perfect arrangement.
A LESSON FROM UNTRADITIONAL MARRIAGE AND THOSE LESS LIKELY TO MARRY
Much of what I have said so far applies not only to heterosexual unions but also to same-sex unions. There is one way in which same-sex unions differ, however; people in same-sex relationships are not subject to the same gender wage gap as are people in heterosexual unions. This means that when choosing how much, or how little, to invest in their careers, lesbians have no reason to expect to be married to a person who earns a higher income than themselves in the same way that heterosexual women might.
There is an interesting observation that lesbians are paid wages that are about 6 to 13 percent higher than the wages paid to heterosexual women. One particular study that seeks to understand this lesbian wage premium gives us some insight into how heterosexual women, who might reasonably plan on being married to men, invest in their careers.
According to the evidence, lesbians are, on average, better educated, more likely to be white, living predominantly in cities, having fewer children, and significantly more likely to be professionals than are other women. Even when researchers control for these differences (essentially comparing women who are in every way similar except in their sexual orientation), the lesbian wage premium persists.
One possible explanation goes back to this story of comparative advantage that we have been discussing—the one that says that because men have historically been paid more to work outside the home, women have been handed the comparative advantage in doing all the laundry.
The gap between women’s and men’s wages may have narrowed, but if a woman believes that she will eventually be married to a man who earns a higher income than herself, then she has less to gain from investing in skills that will give her an advantage on the labor market. This investment in what economists call “human capital” doesn’t include just formal education—researchers can control for that using the data—it also includes a variety of skills that the market rewards with higher wages that we can’t observe in the data: for example, the level of effort a woman is prepared to put forward to advance her own career.
Women who have no intention of ever marrying a man and look forward to a future with a female spouse do not have the same incentive to underinvest in their own human capital. They are just as likely to find themselves in a relationship with a woman who earns a higher income as they are with a woman who earns a lower income. With no expectation that they will later benefit from having a comparative advantage in home production relative to a higher-income-earning husband, it makes sense that lesbian women will invest more in skills that give them an advantage on the labor market.
Nasser Daneshvary, Jeffrey Waddoups, and Bradley Wimmer cleverly test this theory in a paper that calculates the wage premium paid to lesbians in two distinct groups—those who were once in a heterosexual marriage and those who have never been married. The assumption made is reasonable: lesbian women who were once married to men (about 44 percent of lesbian women in the sample) have (presumably) in the past had the expectation that they would have a marriage partner with a higher income. The never-married women might also have had this expectation, but it is much more likely that, on average, women in that group expected to be in a relationship with another woman.
Does the evidence support the theory that the lesbian wage premium can be explained by greater investment in more market-oriented skills by lesbian women? Well, controlling for whether or not a woman was ever in a heterosexual marriage does reduce the lesbian wage premium by about 17 percent, thus providing some evidence to support the theory. At 5.2 percent though, the once-married lesbian premium is still high. Why it exists continues to be a mystery to researchers.
There is further evidence that women who expect to eventually be married tend to underinvest in their careers. This time the evidence comes from a group of women who might reasonably expect, if they have looked at the data, that they will never marry—women who are obese.
Health economist Heather Brown observes that single women who are obese earn higher wages than similar women with a lower body mass index (BMI). This result is a bit puzzling given that, as a group that includes both married and single women, obese women generally face a wage penalty for carrying more body weight.
After controlling for all other attributes that contribute to the wages earned (occupation, health, education, age, number of children, etc.), Brown finds that married men and single women both have a wage rate that is positively related to their BMI—the heavier they are, the higher the wage they are paid.
Among single men and married women, their wage rate and BMI are negatively related; the heavier those men and women are, the lower the wage they are paid.
Brown’s argument for why married men are paid more when they are heavier is that being overweight does not disadvantage men in the marriage market in the same way that it disadvantages women (i.e., preventing them from finding a spouse), but it does encourage them to invest more into their careers in order to compensate their wives for their lack of physical fitness.
A paper that uses data from the United States and nine European countries by Pierre-André Chiappori, Sonia Oreffice, and Climent Quintana-Domeque illustrates this point using the trade-offs that we discussed in chapter 3. They find that an average man can compensate his wife for an additional 22 lbs/10 kg of body weight by earning 1 percent more than the average wage. They find that overweight women, however, are seriously disadvantaged on the marriage market. Not only are they less likely to marry, but when they do marry, they are much more likely to be married to low-income-earning men. For every unit a married woman’s BMI increases, the lower is the earned income of the man to whom she is married.
According to Heather Brown, single women who are heavy recognize that they are less likely to marry, and if they do, they are likely to be married to men who have lower incomes, and so they invest more in their human capital in order to bring their standard of living closer to the point it
might have been had they married.
It is also possible that they invest more in their jobs in an attempt to compensate a potential future spouse for being married to a woman who has a high body weight. There is some evidence they can do that, although not nearly as effectively as men can.
It seems that women who believe they will one day be married to a person with greater earning potential than themselves are underinvesting in their careers as a result of this expectation. Thus, understanding the economics behind the way in which married couples organize production of household goods and services helps explain not only how people choose their partners but also (in part) why the wage gap between men and women persists despite incredible gains by women in the workforce. It is easy to believe that the gender wage gap is entirely the product of discriminatory employers, but it appears that the expectations for marriage of some women is leading to lower workforce productivity and lower wages for women on average.
TIME SPENT IN JAIL IS REDUCING MARRIAGE RATES
According to the Pew Research Center, 62 percent of black women (between the ages of 30 and 44) in 1970 were married, compared with only 33 percent in 2007. The marriage rate has also fallen for black men; in 1970, 74 percent were married, compared with 44 percent in 2007.
Just like other educated women, black women searching for an educated spouse are hard-pressed to find one; 57 percent of black women attend college, compared with only 48 percent of black men. Given that, it is not that surprising that black men with a college degree are far more likely to be married than are black men who did not complete high school: 55 percent of college graduates are married, compared with 27 percent of those with less than a high school education.
This difference in education levels cannot completely explain why the marriage rates for black women are so low. One alternative explanation that has been explored by researchers is that marriage rates are falling because black men are incarcerated at much higher rates than are black women, or anyone else for that matter. If black women have a strong preference to marry black men—and, in fact, 96 percent of married black women are with black men—then high rates of incarceration are disadvantaging black women on the marriage market. This is true not just because black men are absent from their community while incarcerated, but also because a man with a criminal record has a much harder time earning a high-enough income to support a family later in his life.
EDUCATION IS GOOD FOR INTERRACIAL MARRIAGE
Here is an interesting question: if people face a trade-off between finding someone of their own education level or finding someone of their own ethnicity, then what do they choose?
Using U.S. Census data, Delia Furtado and Nikolaos Theodoropoulos find that for every additional year of education a man or woman has, the probability that he/she is married to a person who is the same race decreases by 1.2 percent.
This says that the more educated people are, the more likely they are to marry outside of their ethnic group. This result isn’t altogether surprising given that people who are better educated are more likely to live and work away from their own community.
What is interesting, however, is that in racial communities where the average level of education is higher, this relationship between education and a willingness to marry a person of a different race disappears. In fact, in racial communities with very high average levels of education relative to the rest of the population, people actually have a greater tendency to marry someone of their own ethnicity.
For example, the average Guatemalan in West Palm Beach has seven fewer years of schooling than the rest of the population. For Guatemalans in that city, a one-year increase in education leads to a more than 5-percentage-point decrease in the probability that they will marry another person of Guatemalan ancestry. So, in that community, more education increases the chance a person will marry outside of his/her ethnic group.
Alternatively, the average Indian in Pittsburgh has four more years of education than the rest of the population. For Indians in that city, a one-year increase in education results in an almost 2-percentage-point increase in the probability that they will marry another person of Indian ancestry. So, in that community, more education decreases the chance a person will marry outside of their ethnic group.
Economists tend to assume that parents choose the education level of their child that maximizes their future earning potential, but it is also possible that parents, if they have a strong preference for intra-ethnic marriage, might choose the education level of their children that gives them the highest probability of marrying within their ethnic group. This could very well be a different level of education than one that will make the child materially better off in the future. Understanding the relationship between interethnic marriage and education might explain why we observe large differences in the level of investment in children’s education in different racial communities.
The “Just Say No” campaign in the late 1980s increased the severity of sentencing for drug offenders in the United States. Since that time, and particularly since the mid-1990s, incarceration rates have been steadily increasing to the point that the United States now has one of the highest incarceration rates in the world. This is not just because there are more convictions, but also because longer sentences are increasing the number of people who are in prison at any one point in time.
Incarceration rates vary greatly by both socioeconomic class and race; in 2004, 12.5 percent of all black males age 25 to 29 were incarcerated compared with only 3.5 percent of all Hispanic males and 1.7 percent of all white males of the same age. If women search for a future husband within their community, then some women are more disadvantaged on the marriage market than others when the men in their community are incarcerated at high rates.
Kerwin Kofi Charles and Ming Ching Luoh’s research presents evidence that an increase in the incarceration rate by just 1 percentage point leads to a 2.4-percentage-point decrease in the proportion of women who have ever been married. They argue that 13 percent of the decline in the marriage rate since 1990 can be explained by increased male incarceration alone. Black women have been the most affected by the shortage of men, with increased incarceration explaining about 18 percent of the decline in marriage of black women since 1990.
If incarceration and differential education rates by gender can explain why fewer and fewer black women are marrying, then what explains the fact that educated black men are also marrying at lower rates than they did in the past? We might be tempted to predict that they would marry at higher, not lower, rates as they have become scarce relative to women who are looking for an educated husband. But that clearly hasn’t been the case.
Just as educated black men have a higher value on the marriage market when women outnumber them, their relative scarcity also gives them market power on the casual dating and sex market. Educated black men presumably do not worry that by postponing marriage they are hurting their future marriage prospects, and so they can choose, if they wish, to wait until they have tired of the casual sex market before marrying. If they decide to marry later, as a result of the gender imbalance, then of course marriage rates for those men will appear to be low at any particular point in time.
FINAL WORDS
I don’t expect my economic marriage vows to be very popular, but maybe there is something to be said for acknowledging that no one is perfect. I would like to find a man who is almost as well educated as I am, for example, because it would be nice if we had that much in common. But I might change my mind about that if I met a man who had less education than me and was extremely physically fit, for example. I would be willing to make this trade-off not only because physically fit men are easy on the eyes (they are), but because I would like to find a man who has a better chance at living to an older age. Sure, I would like to have a man who is both well educated and physically fit, but if I can’t find one (or, perhaps more to the point, I can’t find one who wants to be with me), then I have to choose what is more important to me�
��fitness or education.
I argued earlier that without taking into consideration economic forces, our understanding of the world around us is incomplete. This is particularly true when we seek to understand the way in which people choose life partners. One of the most important concepts in economics is that of opportunity cost—the potential benefit that is lost when we choose an alternative option. Being in a committed romantic relationship is all about deciding that the benefits of being in a relationship are greater than the opportunity costs—the benefits to being in an alternative relationship or, even, no relationship at all.
Opportunity costs are subject to economic forces and, as a result, evolve as the economy evolves. Seen within that perspective, it isn’t that surprising that as education has become a more-important determinant of how much income we earn, as men’s comparative advantage over women in waged employment has dissipated, and as opportunities for skilled employment have drawn workers into urban environments, we have changed how we choose our partners.
All of these economic factors have shaped marriage today and will continue to shape marriages in the future. The importance of accepting that is reinforced when we acknowledge that the relationship between marriage and economic factors goes both ways—men and woman take their marriage-market potential into consideration when making important economic decisions. Looking forward, the evolution of the gender wage and education gaps (just to give two examples of economic outcomes) will be shaped, to some degree, by how individuals behave on marriage markets.
Once people marry, the importance of opportunity cost doesn’t disappear; the value that individuals have on the marriage market (or, more to the point, the remarriage market), the greater bargaining power they have within their own marriage. That is the topic for chapter 6, which we will turn to after we take some time to talk about the fine institution of marriage, from a legal and societal perspective.
Dollars and Sex Page 11
