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Male investment in schooling with frictional labour and marriage markets

Author

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  • Roberto Bonilla

    (Newcastle University Business School)

  • Francis Kiraly

    (Newcastle University Business School)

Abstract

We present an equilibrium model with inter-linked frictional labour and marriage markets. Women’s flow value of being single is treated as given, and it captures returns from employment. Men can undertake a costly ex-ante investment in schooling. In the marriage market, women search sequentially for men characterised by wages, so they use a reservation value strategy. Single unemployed men conduct marital sequential search and, with an eye on the marriage market, also conduct a so-called constrained sequential job search. Given this setup, schooling enhances men’s marriage prospects as well as their labour market returns. In turn, women’s behaviour affects men’s schooling investment decision and their optimal job search strategy. We establish that for any given set of parameters, there exists a unique market equilibrium where a fraction of men get educated, and show that this fraction decreases if women’s labour market returns increase. We also examine the robustness of such an equilibrium.

Suggested Citation

  • Roberto Bonilla & Francis Kiraly, 2024. "Male investment in schooling with frictional labour and marriage markets," Review of Economics of the Household, Springer, vol. 22(2), pages 359-385, June.
    • Handle: RePEc:kap:reveho:v:22:y:2024:i:2:d:10.1007_s11150-023-09660-y
    DOI: 10.1007/s11150-023-09660-y
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    References listed on IDEAS

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    1. Browning,Martin & Chiappori,Pierre-André & Weiss,Yoram, 2014. "Economics of the Family," Cambridge Books, Cambridge University Press, number 9780521795395.
    2. Claudia Goldin & Lawrence F. Katz & Ilyana Kuziemko, 2006. "The Homecoming of American College Women: The Reversal of the College Gender Gap," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 133-156, Fall.
    3. Grossbard,Shoshana A. (ed.), 2003. "Marriage and the Economy," Cambridge Books, Cambridge University Press, number 9780521891431, November.
    4. Roberto Bonilla & Francis Kiraly & John Wildman, 2019. "Beauty Premium And Marriage Premium In Search Equilibrium: Theory And Empirical Test," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(2), pages 851-877, May.
    5. Gould, Eric D. & Paserman, M. Daniele, 2003. "Waiting for Mr. Right: rising inequality and declining marriage rates," Journal of Urban Economics, Elsevier, vol. 53(2), pages 257-281, March.
    6. Christopher Flinn & Joseph Mullins, 2015. "Labor Market Search And Schooling Investment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(2), pages 359-398, May.
    7. Grossbard,Shoshana A. (ed.), 2003. "Marriage and the Economy," Cambridge Books, Cambridge University Press, number 9780521814546, November.
    8. Bonilla, Roberto & Kiraly, Francis, 2013. "Marriage wage premium in a search equilibrium," Labour Economics, Elsevier, vol. 24(C), pages 107-115.
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    Cited by:

    1. Roberto Bonilla & Francis Z. Kiraly & John Wildman, 2017. "Marriage Premium and Class," CESifo Working Paper Series 6550, CESifo.
    2. Roberto Bonilla & Francis Kiraly & John Wildman, 2022. "Marriage premium with productivity heterogeneity," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 317-328, January.

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    More about this item

    Keywords

    Returns to education; Frictional markets; Constrained search; Male schooling;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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