Dollars and Sex

by Marina Adshade

  As John said near the end of their relationship, “Marriage has nothing to do with compromise.” And, in his defense, for the majority of the time they had been together, that had been absolutely true.

  In the past thirty years, woman have, on balance, gained more bargaining power in their marriages as a result of economic forces that have leveled the playing field between men and women in the formal labor market. Those same forces that are closing the gap between the incomes of husbands and wives, however, are causing the gap in incomes of rich and the poor to widen, a factor that some economists argue can explain rising divorce rates. In a surprising turn of events, however, marriage has recently been getting a helping hand from two very unlikely sources—economic uncertainty and increased access to the Internet.

  Before we turn to those topics, let me describe a special marriage market that allows men and women to escape their local economic climate, at least temporarily, in search of the perfect romance—the international marriage market.

  FREE TRADE DIS-AGREEMENT

  Remember in chapter 4 that I told you that one of the reasons why people marry is in order to exploit the gains from trade? Well, there is a group of men who take that approach to marriage literally—importing wives into their county in an attempt to subvert the domestic economic forces that have been working to give women more say in their marriages.

  Before I say more on those types of marriages, I want to explain how economists view the way in which couples come to the decision on matters that affect the well-being of everyone in the family.

  Anyone who has ever been married knows that negotiation is an important part of how couples make decisions. How resources are allocated between family members, including to children, is a decision most couples negotiate. How individuals divide their time between working for wages and working in the home, and how their nonwork hours are divided between taking care of household chores and playing, is also a decision most couples negotiate. Many couples negotiate over how many children will be born and how much time each parent will contribute to caring for those children. Negotiations don’t stop at the bedroom door either; many couples negotiate over how often they have sex and what sex acts they are willing to provide for each other.

  Economists use the term “bargaining power” to indicate how effective a person is at negotiating with his or her partner. If two people have equal bargaining power in a relationship, for example, then when there is a disagreement, both have a 50 percent chance that the final decision will be the one they favored. If one person holds more bargaining power than the other, then when there is a disagreement there will be a more than 50 percent chance that the final decision will be the one that person favored. In the extreme case in which one person holds all the bargaining power, then really there is no point negotiating when there is a disagreement since, ultimately, all decisions will be the ones that person favors.

  When men had the comparative advantage in market work, women often stayed home and did the work that economists like to call “home production.” Over the last half-century, however, the wages paid to women relative to men have increased in a way that has diminished men’s comparative advantage in market labor.

  At the same time, the tools that we used in our homes, the technology of home production, have become far more efficient in reducing the need for families to have one person engaged full time in household production (discussed in an important paper by Jeremy Greenwood, Ananth Seshadri, and Mehmet Yorukoglu). Likewise the growth of the service sector has meant that many of the services provided in the past by women in their homes can now be purchased and, thanks to the low wages paid to unskilled workers, are affordable to many families.

  These technology advances have freed women to invest in their careers and acquire greater levels of human capital—the skills and experience that increase productivity, and earnings, in the labor market.

  INDIAN MARRIAGE MARKETS IN A CRISIS

  The use of dating websites in India is pervasive, particularly among the well educated and even more so among women who are seeking husbands who live in other countries. Following the recent global recession, however, the income of these particular men appears less predictable than it was in the past.

  Are potential Indian brides looking elsewhere for their soul mate/sole provider? If they are, then we can add another collapsed market to the already long list: that of the well-heeled, nonresident Indian groom.

  According to reports by Indian-based Internet dating sites, there has been a decisive shift in the search priorities of women away from nonresident Indian men (many of whom have jobs in Internet technology and finance) to resident civil servants. And who can blame them? The life as a wife of a government bureaucrat may not seem as luxurious as that of a wife of a U.S.-based financier, but it is certainly more predictable.

  Among the matrimonially hopeful, it isn’t only the women who are changing their search priorities. It seems that the beginning of the economic downturn marked an increase in men searching for employed women—an increase of 15 percent in 2008.

  This suggests that in the face of increased employment uncertainty, Indian men are more concerned about having wives who can provide them with some insurance should they lose their jobs, and women are more concerned with finding husbands with a stable income.

  Higher wages for working women and the ability to invest in their careers have meant that women who grow tired of continually losing in household negotiations have an alternative to being married: they can leave and still support themselves.

  This implies that men who don’t share decision making, or insist that all disagreements end in their favor, are at much greater risk of divorce than they have been in the past; because women have gained the ability to leave their husbands, both in practice and in law, men have an incentive to split the household bargaining power with their wives more evenly.

  There are, of course, considerations other than earning power that influence how bargaining power is divided between spouses. For example, highly attractive women tend to have more bargaining power than less-attractive women because they have the option of finding another husband should they be unhappy with the way decisions are made in their current marriage. Young gay men who are in relationships with much older men tend to have more bargaining power because, just like highly attractive women, they also have a greater opportunity to find new relationships should their current relationship end. Men who are married to women whose legal status in their country is dependent on their marriage remaining intact hold all the bargaining power, assuming those wives prefer being in a marriage where they have no control to being deported to their home countries.

  This brings us back to our topic of international marriages.

  Not all men embrace the notion of shared decision making with their wives. These men are looking for a “good wife,” which, according to at least one website (www.goodwife.com), means a woman who acknowledges that her husband is master of the house and never questions his authority.

  One way to circumvent the economic forces that have given married women more bargaining power in industrialized nations is for spouse-seeking men to search for wives on marriage markets dominated by women who are disadvantaged on the labor market—marriage markets in less-developed nations.

  Each year hundreds of international marriage brokers extract millions of dollars in revenue from would-be grooms who are willing to go the extra mile to find a good wife. And in response, each year tens of thousands of foreign women (and some gay men) are willing to take the chance that their new life, in a foreign country, will be better than the one they are leaving behind.

  International marriage brokers sell the idea of cross-cultural marriages by convincing men that foreign women are more willing to accept an arrangement in which wives are submissive to their husband’s wishes.

  Don’t take my word for it, consider the following quote from the marriage broker website www.goodwife.com:

  “We, as men, are
more and more wanting to step back from the types of women we meet now. With many women taking on the “me first” feminist agenda and the man continuing to take a back seat to her desire for power and control, many men are turned off by this and look back to having a more traditional woman as our partner.”

  This website, and hundreds of others like it, promote the notion that women from economically disadvantaged countries will be grateful for the privileges their Western husbands can provide and, as a result, be less likely to ask that household resources be allocated toward their needs or those of their children. What these sites do not mention, but still imply, is that because it is difficult for women who find themselves unhappy with this arrangement to credibly threaten divorce, they will have a hard time insisting on greater say in household decisions.

  On the other hand, foreign-born wives who bring with them professional skills and education can reasonably expect that once they are settled, and language barriers have been overcome, to have the same opportunities as domestic women for employment outside of the home. If they do have opportunities to be independent, then there is no reason to believe that the same economic forces that have led to greater bargaining power of domestic wives won’t encourage foreign-born wives to insist on more input into household decision making.

  It is perhaps this conflict between expectations of domestic husbands and foreign-born wives that has led Jane Kim, and others, to document high levels of domestic abuse and divorce within these types of relationships.

  Interestingly, though, economic theory (discussed in chapter 4) predicts that the gains from within household trade are greatest when each partner brings a different set of skills to the marriage. If this theory is correct, then domestic husbands with foreign-born wives should be better off than domestic husbands with domestic wives because their wives have a comparative advantage in home production, leaving them to specialize in labor market employment. It also suggests that foreign-born wives with domestic husbands should be better off than domestic wives with domestic husbands because their husbands have a comparative advantage in labor market employment, which leaves them to specialize in caring for the children and the home.

  Fortunately for us, the theory that well-being is greater in marriages where each person brings different skills to the relationship has been tested using data collected from more than eight thousand Australian households. Mathias Sinning and Shane Worner look for evidence that men and women in cross-cultural marriages, those that have the greatest opportunity to exploit the gains from within household trade, are happiest in their marriages. Turns out that this isn’t the case.

  Happiness in their marriages (measured on a scale of 1 to 10) is highest in couples in which both husband and wife are native-born and in couples in which both husband and wife are foreign-born. The couples who reported the lowest levels of marital happiness, on average, were those in which one spouse was foreign-born and other spouse was native-born.

  Contrary to economic theory, the happiest marriages appear to be those in which husbands and wives are more similar to each other, not different. This explains why, in general, we don’t tend to seek partners who have vastly different skill sets than our own but rather choose people who are similar to ourselves. This behavior may not maximize the gains from trade in terms of household production—but it does appear to make us happy.

  WALKING IN MEN’S SHOES IN THE WORKPLACE

  The gender wage gap persists despite economic gains by women and legislation that prevents gender-based discrimination. Economic arguments can explain part of that wage gap (for example, the argument that women experience costly career disruptions when they have children), but is there evidence that the wage gap exists because employers discriminate against women?

  There’s a unique set of men in the workforce whose experiences just might provide evidence of discrimination. They are the men who partway through their careers stopped being outwardly identified as women and instead became identified as men.

  Sociologist Kristen Schilt spoke to female-to-male transsexuals and found that older, white transmen enjoyed greater authority and respect than they had experienced as women. They felt they were perceived to be right more often and encountered much less resistance when they expressed their opinions. Some even reported that employers who had sanctioned them for expressing their ideas as women rewarded the same behavior when they were men. They were given more resources and support at work, improving their job performance, and, as a result, they saw improvements in their income.

  Many of the men in the survey observed that, as men, they were more highly rewarded for additional education than they were as women and, as a result, returned to school post-transition in order to take advantage of those additional rewards.

  Many of Schilt’s participants found that when they “took charge,” their behavior was seen in a more positive light than it had been previously. Before their transition, their bosses and coworkers would read that same kind of behavior as excessively assertive.

  African American transmen, on the other hand, felt that they couldn’t express frustration at work without being sanctioned for being aggressive. Asian transmen faced criticism for being too passive, a stereotype they had not experienced as Asian women. Those transmen who looked young suffered for not fitting a macho stereotype and for appearing inexperienced.

  This may not be definitive evidence of wage discrimination based on gender, but it does suggest that employers should think carefully about the way in which they assess the competence of their employees. If female workers are perceived as less competent than male workers, or consistently lack the resources to do their jobs well, then closing the gender wage gap can be achieved only if women can manage to significantly outperform men in their jobs.

  THE VALUE OF A UNIVERSITY DEGREE? A MORE STABLE MARRIAGE

  In 1970, only 28 percent of husbands had more education than their wives, but, despite this, only 4 percent of women earned more than their husbands. In 2007, only 19 percent of husbands had more education than their wives, but now 22 percent of women earn more than their husbands.

  The big change in last thirty years has been that women are not only more likely to have as much, or more, education than their husbands; they are far more likely to outearn them as well.

  Having more education and a higher wage may make it easier for married women to leave an unhappy marriage, but does that imply that higher rates of education for women are responsible for high divorce rates?

  LESBIANS ARE BETTER SAVERS

  A recent paper by Brighita Negrusa and Sonia Oreffice sets out to test a hypothesis that couples in same-sex relationships plan their finances differently from those in opposite-sex relationships. They find, on average, that women in same-sex relationships are significantly better savers than either men in same-sex relationships or heterosexual married couples.

  The authors use the ratio of mortgage payments to the value of a couple’s home as a measure of how good they are at saving because couples who are good savers will, on average, repay their mortgages at a faster rate than those who are poor savers.

  Compared with heterosexual married couples and gay couples, lesbian couples pay almost 9 percent more on their annual average mortgage even after controlling for age, education, and socioeconomic factors (including the number of children living in the home).

  This isn’t the only evidence that lesbians are better savers. Looking at the income of seniors, retired women in same-sex relationships have on average $4,715.35 more in Social Security and retirement income than do heterosexual married couples. Gay men also have more income than heterosexual couples, but that result probably stems from that fact that, in general, men retire with higher incomes than do women.

  There are two possible reasons why women in same-sex marriages might be better savers, besides having fewer children than heterosexual women. The first is related to life expectancy; women live longer on average and realistically need to save more in preparation fo
r the period of their life when they have no waged income.

  The second reason is explained by relationship stability. This data was collected before same-sex marriages were legal in any country; in planning their future, therefore, lesbian women would have had no way to predict that one day they would be offered the same security as heterosexual couples (and of course many are still waiting for that to happen).

  If the observed higher savings rate for lesbian woman reflects insecurities around the legal status of their relationships, then when those relationships are given legal recognition, we can reasonably predict that the savings rates of those families will fall.

  According to a paper by Philip Oreopoulos and Kjell Salvanes, the answer to this question is “No”; they find that more-educated people are significantly less likely to have ever been divorced.

  For example, they find that a person who didn’t complete high school has a 16 percent chance of being divorced. A person with a high school diploma, but no more, has a 10 percent chance of being divorced. And a person with a postgraduate degree has less than a 3 percent chance of ever having been divorced.

  If you think these numbers look low compared with the 50 percent divorce rate we have all heard before, you are right. That is not only because the 50 percent divorce rate is inaccurately measured (it really is), but also because these numbers are for everyone—not just for people who have been married. But because educated people are more likely to have ever been married than are less-educated people, these results that suggest that educated people are less likely to have been divorced are an even more convincing argument that educated people divorce less frequently.

  Why do educated people divorce less frequently? Perhaps they are hotter commodities on the marriage market and end up in higher-quality marriages. Or, maybe, because they are older when they marry, they choose their marriage partner more carefully. Perhaps educated people are more skilled negotiators, making it easier for them to navigate rocky patches in their marriages. Divorce is more expensive for high-income couples, so it would be reasonable for educated people to avoid that expense. Or, as we will discuss shortly, it could be because educated people suffer less job instability, avoiding that additional stressor on marriage.