Is Marriage Poisonous? Are Relationships Taxing? An Analysis of the Male Marital Wage Differential in Denmark

29 Pages Posted: 18 May 2005

See all articles by Nabanita Datta Gupta

Nabanita Datta Gupta

Department of Economics and Business, Aarhus University; IZA Institute of Labor Economics

Nina Smith

Aarhus University - Department of Economics and Business Economics; IZA Institute of Labor Economics

Leslie S. Stratton

Virginia Commonwealth University - School of Business - Department of Economics; IZA Institute of Labor Economics

Date Written: May 2005

Abstract

The word for 'married' in Danish is the same as the word for 'poison.' The word for sweetheart' in Danish is the same as the word for 'tax.' In this paper we expand upon the literature documenting a significant marital wage premium for men in the United States to see if a similar differential exists for married men in Denmark - or if the homonyms have perhaps less of a double meaning. Unlike most other research in this area, our study is based on a large panel sample with complete relationship histories, consisting of about 35,000 young Danish men observed before and after their first marriage or cohabitation during the years 1984-2001. Since the majority of young Danes cohabit before they marry, if they ever marry, cohabitation is allowed for as a separate state. Pooled OLS estimates indicate a marital wage premium of 4-5%, which drops to 2% after controlling for selectivity. The cohabitation premium is found to be of the same size as the marital wage premium. Our results indicate that a part of the marriage or cohabitation premium is not due to marriage or cohabitation itself, but to fatherhood. When information on becoming a father and years spent in fatherhood is added to the empirical model, the results show that fathers receive a 'fatherhood' premium during their first few years as fathers and that the initial marital wage premium is reduced.

Keywords: marriage premium, cohabitation, fatherhood

JEL Classification: J12, J31

Suggested Citation

Datta Gupta, Nabanita and Smith, Nina and Stratton, Leslie S., Is Marriage Poisonous? Are Relationships Taxing? An Analysis of the Male Marital Wage Differential in Denmark (May 2005). Available at SSRN: https://ssrn.com/abstract=725442

Nabanita Datta Gupta

Department of Economics and Business, Aarhus University ( email )

Fuglesangs Allé 4
8210 Aarhus V
Denmark
+45 87165207 (Phone)

HOME PAGE: http://pure.au.dk/portal/da/ndg@econ.au.dk

IZA Institute of Labor Economics

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

Nina Smith (Contact Author)

Aarhus University - Department of Economics and Business Economics ( email )

Universitetsparken
DK-8000 Aarhus C
Denmark
+45 8948 6413 (Phone)
+45 8615 5175 (Fax)

IZA Institute of Labor Economics

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

Leslie S. Stratton

Virginia Commonwealth University - School of Business - Department of Economics ( email )

Box 844000
Richmond, VA 23284-4000
United States
804-828-7141 (Phone)
804-828-1719 (Fax)

IZA Institute of Labor Economics

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

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