Marital Sorting and Parental Wealth

40 Pages Posted: 31 Jan 2011 Last revised: 30 Apr 2013

See all articles by Kerwin Kofi Charles

Kerwin Kofi Charles

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies

Erik Hurst

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Alexandra Killewald

Harvard University

Date Written: January 2011

Abstract

Using data from the Panel Study of Income Dynamics (PSID), this paper studies the degree to which spouses sort in the marriage market on the basis of parental wealth. We estimate a variety of models, including transition matrices, OLS and TSLS models to deal with measurement error in wealth reports. Our various results show that men and women in the U.S. marry spouses whose parents have wealth similar to that of their own parents; and are very unlikely to marry persons from very different parental wealth backgrounds. This effect is present in the population as a whole, within racial groups, and especially in the tails of the distribution. Our preferred estimates indicate that the correlation in log wealth between own and spouse's parents wealth is around 0.4. We show that education accounts for only one-quarter of this sorting, and also show that selection into and out marriage by parental wealth does not appreciably bias our results.

Suggested Citation

Charles, Kerwin Kofi and Hurst, Erik and Killewald, Alexandra, Marital Sorting and Parental Wealth (January 2011). NBER Working Paper No. w16748. Available at SSRN: https://ssrn.com/abstract=1751446

Kerwin Kofi Charles (Contact Author)

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies ( email )

1155 East 60th Street
Chicago, IL 60637
United States
(773) 834-8922 (Phone)

Erik Hurst

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alexandra Killewald

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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