The White Picket Fence Dream: Effects of Assets on the Choice of Family Union

Abstract

A recent strand of literature in demography argues that young unmarried Americans value marriage so highly that it is perceived as a family status to be chosen after certain economic preconditions are fulfilled - after they have achieved the so-called "white picket fence dream" (a house, surplus income, etc.). Motivated by these claims, in this paper, we use data from the National Longitudinal Survey of Youth 1979 to examine whether there is any direct relationship between the individual's housing and financial assets and his/her transition into marriage or cohabitation. For both men and women, analysis using a proportional hazard model indicates a positive association of asset ownership with transition into marriage, but not with transition into cohabitation. Considering the potential endogeneity of asset accumulation with respect to the choice of family status, we implement instrumental variables probit estimation. These estimates either remove the statistical significance of the association between asset ownership and family union transitions, or identify effects that are in the opposite direction to those derived from the time-to-event analysis.

Keywords: Asset, home-ownership, family, marriage, cohabitation

JEL Classification: D1, J12