Marital Sorting, Inequality and the Role of Female Labour Supply: Evidence from East and West Germany

24 Pages Posted: 7 Dec 2016

See all articles by Nico Pestel

Nico Pestel

IZA Institute of Labor Economics

Date Written: January 2017

Abstract

This paper examines the effect of marital sorting on earnings inequality, taking into account extensive and intensive margin labour supply choices. Using German microdata, the observed distribution of couples’ earnings is compared to a counterfactual of random matches. In West Germany, marital sorting is found to be disequalizing only after adjusting for labour supply. This means that positive sorting in earnings potential is veiled by low female participation rates. In East Germany, the impact is highly disequalizing even when earnings are taken as given, due to the fact that East German women are more attached to the labour market.

Suggested Citation

Pestel, Nico, Marital Sorting, Inequality and the Role of Female Labour Supply: Evidence from East and West Germany (January 2017). Economica, Vol. 84, Issue 333, pp. 104-127, 2017. Available at SSRN: https://ssrn.com/abstract=2880991 or http://dx.doi.org/10.1111/ecca.12189

Nico Pestel (Contact Author)

IZA Institute of Labor Economics ( email )

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

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