Educational Assortative Mating and Household Income Inequality

75 Pages Posted: 8 Jul 2014

See all articles by Lasse Eika

Lasse Eika

Statistics Norway

Magne Mogstad

Statistics Norway; IZA Institute of Labor Economics

Basit Zafar

Arizona State University

Multiple version iconThere are 3 versions of this paper

Date Written: July 2014

Abstract

We document the degree of educational assortative mating, how it evolves over time, and the extent to which it differs between countries. Our analysis focuses on the U.S. but also uses data from Denmark, Germany, the U.K., and Norway. We find evidence of positive assortative mating at all levels of education in each country. However, the time trends vary by the level of education: Among college graduates, assortative mating has been declining over time, whereas the low-educated are increasingly sorting into internally homogeneous marriages. These findings motivate and guide a decomposition analysis where we quantify the contribution of various factors to the distribution of household income. We find that educational assortative mating accounts for a non-negligible part of the cross-sectional inequality in household income in each country. However, changes in assortative mating over time barely move the time trends in household income inequality. This is because the inequality contribution from the increase in assortative mating among the low educated is offset by the equalizing effect from the decline in assortative mating among the highly educated. By comparison, increases over time in the returns to education generate a considerable rise in household income inequality, but these price effects are partly mitigated by increases in college attendance and completion rates among women.

Suggested Citation

Eika, Lasse and Mogstad, Magne and Zafar, Basit, Educational Assortative Mating and Household Income Inequality (July 2014). NBER Working Paper No. w20271. Available at SSRN: https://ssrn.com/abstract=2463386

Lasse Eika (Contact Author)

Statistics Norway ( email )

N-0033 Oslo
Norway

Magne Mogstad

Statistics Norway ( email )

N-0033 Oslo
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Basit Zafar

Arizona State University ( email )

WP Carey School of Business, ASU
Tempe, AZ 85287
United States
9179326564 (Phone)

HOME PAGE: http://https://sites.google.com/site/basitakzafar/

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