How Do Marital Status, Wage Rates, and Work Commitment Interact?
University of Haifa
Robert I. Lerman
The Urban Institute; American University; IZA Institute of Labor Economics
IZA Discussion Paper No. 1688
How marriage interacts with men's earnings is an important public policy issue, given debates over programs to directly encourage healthy marriages. This paper generates new findings about the earnings-marriage relationship by estimating the linkages between marriage, work commitment, and wage rates. Unlike other studies of the marital wage premium for men, we examine how marital status and marital transitions affect hours worked as well as wage rates, take account of the feedback effect on wage rates and earnings associated with marriage effects on hours worked, estimate marriage effects on black and low skill men, control for several dimensions of selection, and follow men from age 17-40. We find that marriage increases men's earnings by about 20 percent and also find a rise in wage rates and hours worked increases marriage. These findings suggest that both marriage-enhancing and earnings-enhancing policies can set off a virtuous circle, in which marriage and earnings reinforce each other over time. Unmarried men who appear unable to support a family because of low current earnings are likely to become more adequate breadwinners once they marry. Thus, if proposed programs are able to increase the utility from and appreciation of marriage, they are likely to generate earnings gains for men as an important side effect.
Number of Pages in PDF File: 45
Keywords: labor supply, wage determinants, marriage, marital dissolution
JEL Classification: C23, J12, J15, J22, J31, J88
Date posted: August 8, 2005