On the Economics of Marriage: A Theory of Marriage Labor, and Divorce

Book · January 1993with281 Reads

Publisher: Westview Press, Perseus Books
Abstract
contains following parts: A General Theory of Marriage; Sex Ratio Effects; Compensating Differentials in Marriage (applied to labor supply and to religious intermarriage) ; Cohabitation, Divorce, and Polygamy; and Marriage, Productivity, and Earnings
Introduction
This book deals with marriage from various perspectives.
From the perspective of the different disciplines, this book deals with
the
economics
of marriage to the extent that most hypotheses
developed and tested are based on economic theory. It can also be
classified as economics in the sense that it touches on many topics
traditionally analyzed by economists, such as labor supply, labor
productivity and earnings. T his book can be classified as
sociology,
demography, or anthropology
to the extent that it deals with topics
such as marriage rates, consensual unions, polygamy, and the
distribution of power in marriage, which have traditionally been
considered part of the domain of these disciplines.
While this book contains a lot of facts and
empirical
findings,
and touches on policy issues, the book's main contribution to the
existing literature lies in the
theoretical
perspective it offers. T he
central part of the book is Part Two, which presents a general
equilibrium theory of marriage. Years of experience have taught me
that most people lack the motivation to read this kind of theoretical
material on marriage. Common reasons why people shy away from
such theory are the notions that (1) economics does not have much
to add to the existing literature on marriage, and (2) an economic
analysis of marriage leads to undesirable practical implications, such as
denial of love and glorification of selfishness. Since such notions are
so widespread, Part One of this book attempts to dispel them.
Addressing the first notion, the materials in Part One aim at
showing that other disciplines do not offer close substitutes to an
economic analysis of marriage. Chapter 1 compares the economics of
marriage with some of the related literature found in anthropology
and sociology. T hese disciplines provide a wealth of studies about
marriage, including some theoretical material. However, sociological
and anthropological theories of marriage have some drawbacks in
comparison to economic theories of marriage.
Part One also addresses the second notion that discourages
many people from reading an economic analysis of marriage, namely,
the notion that an economic approach to the analysis of marriage
leads to the denial of emotions and social or spiritual concerns. Most
people, including most social scientists, think about marriage either in
romantic terms, or in ethical-religious terms. T o some extent,
romanticism contradicts the economic approach. Romantics typically
rely on feelings in making decisions, not on rational comparisons of
costs and benefits. The romantic mentality stresses individual
uniqueness, and stands in sharp contrast to the economic approach in
which markets play a central role. Chapter 2 attempts to dispel the
notion that by applying economics to the study of marriage one
suppresses basic human tendencies for love and intimacy.
Some readers may want to start directly with Part Two, which
presents the general equilibrium theory of labor and marriage that
served as inspiration to most of the other papers in this volume.
Previous analyses of marriage, whether they were written by
sociologists or by economists, have not integrated marriage markets
with labor markets. T his theory uses a general equilibrium framework
to integrate labor and marriage markets. Predictions are derived
regarding the effects of particular factors, such as individual resources
and market size, on individual and market labor supply and marital
choices. T he two chapters in Part T wo complement each other.
Chapter 3 emphasizes theory and applications to labor supply,
whereas Chapter 4 emphasizes implications for the study of marriage
and divorce. Readers who lack a background in economic analysis may
want to skip the first part of Chapter 3.
Parts T hree and Four deal with implications of the theory: sex
ratio effects and compensating differentials in marriage. A major
implication of this general equilibrium theory integrating marriage
markets with labor markets, is that the sex ratio of marriageable men
to marriageable women may influence labor supply as well as
marriage. Part Three consists of two chapters dealing with sex ratio
effects.
The first chapter on sex ratio effects, Chapter 5, was written
for a mixed audience of sociologists and economists, and avoids the
technical jargon and statistical techniques familiar to economists.
Chapter 6 is addressed to readers trained in economics or statistics and
includes regression results. The two chapters also vary in the
generality of their subject matter. Whereas Chapter 6 focuses on only
one effect of sex ratio variations, namely, its effect on the
participation of married women in the labor force, Chapter 5 looks at
the effect of sex ratio variations on a number of social and economic
aspects of life.
The two papers included in Part Four both deal with
compensating differentials in marriage. Chapter 7 is a study of
married women's labor supply and shows how differences between
husband's and wife's characteristics, associated with compensating
differentials in marriage, add to our degree of understanding of
women's labor force participation. T he paper was written for an
audience of economists.
Chapter 8 attempts to explain an aspect of similarity between
husband's and wife's characteristics, what sociologists call homogamy.
The degree of homogamy in one dimension, such as religion, is related
to the similarity of husband's and wife's characteristics in other areas,
such as education, age, and divorced status. It is assumed that
compensating differentials in marriage exist. Hypotheses regarding
the likelihood of intermarriage between members of different groups
are derived and estimated, using the example of Jewish men in the
United States.
The general equilibrium theory of marriage and labor can be
applied in many different ways to the study of marriage, as suggested
in Chapter 4. Part Five presents further applications of the theory to
selected aspects of marriage. Chapter 9 deals with marriage formality
and cohabitation, Chapter 10 with divorce and labor supply, and
Chapter 11 with polygamy. T hese chapters test a number of
hypotheses regarding the effect of aggregate characteristics--such as
sex ratios--and individual characteristics--such as education and
income--on these aspects of marriage.
The theory of marriage presented in Part Two views
individuals as suppliers of spousal labor, and defines spousal labor as
any service benefiting a spouse. Such spousal labor is not simply about
washing dishes and taking care of the garden, but also about investing
in a spouse's human capital. People invest in their spouse's human
capital to the extent that household labor boosts the spouse's earning
capacity or other aspects of the spouse's productive capacity
(including the capacity to produce at home). T he papers in Part Six
of the volume all deal with aspects of spousal help that increase a
person's human capital.
Chapters 12 to 14 deal with spousal help aimed at increasing a
worker's earning capacity, whereas Chapter 15 focuses on the
contribution of a spouse to an individual's religious practice, which can
be considered as a particular aspect of home production. The last two
chapters are of an empirical nature. T hey both analyze Israeli data
and were written with Shoshana Neuman. Dafna Izraeli also
collaborated on Chapter 14.
    • Also, couples may not always match on human capital traits – for example, if natives marry immigrant women from traditional societies to reemphasize home-building and child-rearing (Basu, 2015), household specialization might be efficient in certain intermarried female families. Educated immigrants, particularly women, may exchange their labor market aspirations for higher societal status from marriage to a native (Grossbard-Shechtman, 1993) – this is a special case of status exchange.
    [Show abstract] [Hide abstract] ABSTRACT: Intermarriage between a native and immigrant can affect the household's supply of labor hours. Spouse selectivity on the basis of human capital, distribution of bargaining power and labor supply coordination within the household can differ by type of marriage and gender of the immigrant – and, consequently, affect how spouses supply labor to the market. Using the 2010 American Community Survey, a household labor market specialization index is created. Raw two-limit Tobit estimates show lower specialization in intermarried households for both genders, compared to their intra-married counterparts. The finding for intermarried female households is reversed, and gender-based specialization increases, when controls for human capital are introduced. The role of immigrant education for both intermarried men and women is underscored – specialization differences, by type of marriage, are insignificant when the immigrant has post-college education. At lower levels of immigrant education, native spouses supply more market labor. Intermarriage may also skew bargaining power in favor of native husbands in immigrant female households.
    Full-text · Article · Jul 2017
    • A general explanation of exchange, commonly found in the literature, is compensating differentials (e.g.,Gullickson and Fu 2010;Kalmijn 2010;Rosenfeld 2005). Just as workers need to be paid more to take a hazardous job, in a competitive marriage market people pay a " price " to marry those with a desirable trait they do not have themselves (Grossbard-Shechtman 1993). As the number of characteristics that individuals sort on increases, it becomes increasingly difficult to form a perfectly homogamous match (Cheng and Xie 2013).
    [Show abstract] [Hide abstract] ABSTRACT: Intermarriage plays a key role in stratification systems. Spousal resemblance reinforces social boundaries within and across generations, and the rules of intermarriage govern the ways that social mobility may occur. We examine intermarriage across social origin and education boundaries in the United States using data from the 1968–2013 Panel Study of Income Dynamics. Our evidence points to a pattern of status exchange—that is, persons with high education from modest backgrounds tend to marry those with lower education from more privileged backgrounds. Our study contributes to an active methodological debate by pinpointing the conditions under which the results pivot from evidence against exchange to evidence for exchange and advances theory by showing that the rules of exchange are more consistent with the notion of diminishing marginal utility than the more general theory of compensating differentials.
    Full-text · Article · Nov 2016
    • This issue was studied here by focusing on the effect of (female) migrants on the native marriage market. Research noted that divorce rates tend to be higher when there is a surplus of marriageable women (Grossbard-Shechtman 1993). Migration often brings just such a surplus of women, and these women may be a factor in the breakdown of native marriages.
    [Show abstract] [Hide abstract] ABSTRACT: Previous research has noted that divorce rates tend to be higher when there is a surplus of marriageable women in the marriage market. This paper argues that the size and the composition of the female migrant population can affect the marital stability of natives. We tested such hypothesis taking Italy as a case-study because it exemplifies a male-breadwinner society and because it is a relatively new immigration country. We estimated discrete-time event history models predicting marital disruption on data from the nationally representative 2009 Family and Social Subjects survey. Our results illustrated that the increasing presence of first mover migrant women (coming from Central-South America and Eastern Europe) was associated with higher separation risks among natives, especially for couples with lower human capital. By advancing the relevance of foreigners as a potential driver of natives’ family life courses, our findings add to our understanding of partnership dynamics in recent immigration countries.
    Full-text · Article · May 2016
    • potential partners that influence marital entry and dissolution (e.g., Becker 1981; Grossbard-Shechtman 1993, 2003; Oppenheimer 1988). Some similarities between Guttentag and Secord's sex ratio thesis and economic-based marriage models are clear.
    [Show abstract] [Hide abstract] ABSTRACT: Although marriage market characteristics are often used to explain in–out marriage transitions, Guttentag and Secord's sex ratio thesis provides a unique theoretical framework by which to elucidate marriage and divorce. The theory emphasizes the availability of “opposite” sex partners as an important factor, but hypothesized outcomes assume a gendered marriage market whereby males are more socioeconomically powerful than females. Using geographically standardized census tract data (N = 65,443), I examine the theory empirically across three decennial time points. After establishing that males, on average, hold a disproportionate amount of socioeconomic power, I conduct cross-sectional regression analyses of marriage and divorce from 1980 to 2000. Results partially support the theory. While female marriage is consistently related to sex ratios as expected, sex ratios influence male marriage as expected only in some time periods and female and male divorce do not operate as expected in any time point. The findings imply that marriage entry and dissolution have distinctive causal mechanisms, suggesting the need for further theorization and research.
    Article · Oct 2015
    • We would need to consider bargaining within the household to allow for this (see, for example, Manser and Brown 1980). Moreover, Grossbard-Shechtman (1993) argues that a cohabitant's bargaining power is lower than a spouse's bargaining power resulting in a cohabitant having a lower share of household income than a married woman. This hypothesis is consistent with Mukhopadhyay (2008).
    [Show abstract] [Hide abstract] ABSTRACT: In raw data in the UK, the income loss on separation for women who were cohabiting is less than the loss for those who were married. Cohabitants lose less even after controlling for observable characteristics including age and the number of children. This difference is not explained by differences in access to benefits or labor supply responses after separation. In contrast, there is no difference in the change in household income experienced by cohabiting and married men who do better on average than both groups of women. We show that the difference for women arises because of differences in the use of family support networks: cohabitants’ standard of living falls by less because they are more likely to live with other adults, particularly their family, following separation, even after controlling for age and children. Divorced women do not return to living with their extended families. The greater legal protection offered by marriage does not appear to translate into economic protection.
    Full-text · Article · Apr 2015
    • Our explanation for the inverse relationship between women's wages and their husbands' leisure is that, as women can see their income increase, they negotiate more arrangements involving men's domestic production (income effect). Such negotiations are compatible with a conception of the couple as composed of two individuals with separate goals (Becker, 1973; McElroy and Horney, 1981; Grossbard-Shechtman, 1993; Chiappori et al., 2002). There may be a substitution effect: as her time becomes relatively more expensive, he may perform more household chores, freeing more of her time for leisure activities (Grossbard-Shechtman, 2003).
    [Show abstract] [Hide abstract] ABSTRACT: From the 1998-1999 French Insee time use survey, the time cost of children is estimated in terms of hours of foregone leisure. The focus on couples with two spouses working full-time implies no need to be concerned about substitution between home production and labor supply. The model accounts for selection into full-time employment, endogenous wages, and controls for outside help with home production and childcare. The foregone leisure cost per child under 3 is 1.6 hours for each parent. It is about half that size for children aged 3 to 14. Children over 14 involve no leisure cost to parents. JEL classification: J13, J22.
    Full-text · Article · Apr 2015
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