An Investment-and-Marriage Model with Differential Fecundity

Abstract

I build a stylized investment-and-marriage model to provide a surprising explanation of why in the United States and many other countries women attend college at higher rates but continue to earn lower average incomes than men. Differential fecundity and a general-equilibrium marriage-market effect form the basis of my explanation. The model can also account for the relationship between age at marriage and personal midlife income for men and women as well as the relationship between age at marriage and spousal midlife income for women. Empirical evidence and calibration results support my explanations for these facts.

Keywords: college gender gap, age at marriage, income

JEL Classification: C78, D1