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Job Turnover, Wage Rates, and Marital Stability: How Are They Related?

51 Pages Posted: 2 Jul 2004  

Avner Ahituv

University of Haifa

Robert I. Lerman

The Urban Institute; American University; IZA Institute of Labor Economics

Date Written: January 2005

Abstract

This study examines the interplay between job stability, wage rates, and marital instability. We use a Dynamic Selection Control model in which young men make sequential choices about work and family. Our empirical estimates derived from the model account for self-selection, simultaneity and unobserved heterogeneity. The results capture how job stability affects earnings, how both affect marital status, and how marital status affects earnings and job stability. The study reveals robust evidence that job instability lowers wages and the likelihood of getting and remaining married. At the same time, marriage raises wages and job stability. To project the sequential effects linking job stability, marital status, and earnings, we simulate the impacts of shocks that raise preferences for marriage and that increase education. Feedback effects cause the simulated wage gains from marriage to cumulate over time, indicating that long-run marriage wage premiums exceed conventional short-run estimates.

Keywords: Marriage and Marital Dissolution, Job Turnover, Wage differentials

JEL Classification: C15, C33, J12, J31, J63

Suggested Citation

Ahituv, Avner and Lerman, Robert I., Job Turnover, Wage Rates, and Marital Stability: How Are They Related? (January 2005). IZA Discussion Paper No. 1470. Available at SSRN: https://ssrn.com/abstract=560241

Avner Ahituv (Contact Author)

University of Haifa ( email )

Haifa
Israel
04-8249588 (Phone)

Robert I. Lerman

The Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

American University

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States

IZA Institute of Labor Economics

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

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