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Does Marriage Pay More than Cohabitation?: Selection and Specialization Effects on Male Wages in Germany

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  • Katherin Barg
  • Miriam Beblo

Abstract

Empirical research has unambiguously shown that married men receive higher wages than unmarried, whereas a wage premium for cohabiters is not as evident yet. Our paper exploits the observed difference between the marital and the cohabiting wage premium in Germany and thus provides new insights into their respective sources, typically explained by specialization (husbands being more productive because their wives take over household chores) or selection (high earnings potentials being more attractive on the marriage market). We analyze the cohabiting and the marital wage premium in Germany using a shifting panel design for marriages and move-ins from 1993 to 2004 in the German Socio-Economic Panel. With non-parametric matching models we match men who get married (treatment group I) with cohabiting or single men (control groups) and men who move in with a partner (treatment group II) with singles. Matching reveals that higher wages are mostly due to positive selection - into marriage as well as into cohabitation. Supplementary analysis of intra-household time use suggests that specialization, if any, is part of the selection process from single to cohabitation to marriage.

Suggested Citation

  • Katherin Barg & Miriam Beblo, 2008. "Does Marriage Pay More than Cohabitation?: Selection and Specialization Effects on Male Wages in Germany," SOEPpapers on Multidisciplinary Panel Data Research 82, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp82
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    References listed on IDEAS

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    1. Schoeni, Robert F, 1995. "Marital Status and Earnings in Developed Countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 8(4), pages 351-359, November.
    2. Sanders Korenman & David Neumark, 1991. "Does Marriage Really Make Men More Productive?," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 282-307.
    3. Kate Antonovics & Robert Town, 2004. "Are All the Good Men Married? Uncovering the Sources of the Marital Wage Premium," American Economic Review, American Economic Association, vol. 94(2), pages 317-321, May.
    4. Maasoumi, Esfandiar & Millimet, Daniel & Sarkar, Dipanwita, 2005. "The Distribution of Returns to Marriage," Departmental Working Papers 0503, Southern Methodist University, Department of Economics.
    5. Donna K. Ginther & Madeline Zavodny, 2001. "Is the male marriage premium due to selection? The effect of shotgun weddings on the return to marriage," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(2), pages 313-328.
    6. Kenny, Lawrence W, 1983. "The Accumulation of Human Capital during Marriage by Males," Economic Inquiry, Western Economic Association International, vol. 21(2), pages 223-231, April.
    7. Reed, W Robert & Harford, Kathleen, 1989. "The Marriage Premium and Compensating Wage Differentials," Journal of Population Economics, Springer;European Society for Population Economics, vol. 2(4), pages 237-265.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Marriage & prejudice
      by chris dillow in Stumbling and Mumbling on 2009-10-17 15:52:21

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    More about this item

    Keywords

    Marital wage premium; cohabitation; matching approach;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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