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Does Marriage Really Make Men More Productive?

Does Marriage Really Make Men More Productive?. Alisa Zhou. Marriage and Productivity. Marriage Wage Premium for males 10-40% range 14 industrialized countries Direction of Causality Does marriage make men more productive? Or do more productive men get married? Hypotheses Productivity

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Does Marriage Really Make Men More Productive?

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  1. Does Marriage Really Make Men More Productive? Alisa Zhou

  2. Marriage and Productivity • Marriage Wage Premium for males • 10-40% range • 14 industrialized countries • Direction of Causality • Does marriage make men more productive? • Or do more productive men get married? • Hypotheses • Productivity • Selection • Employer Favoritism

  3. Productivity Hypothesis • Marriage makes men more productive • Division of labor within the household • Marriage allows men to invest more heavily in labor market oriented human capital • Married men have greater opportunities to specialize in labor market activities

  4. Selection Hypothesis • More productive men are selected into marriage • Unobservable individual effects • Characteristics that are highly valued in the labor market also valued in the marriage market • Married men do not become productive, they were productive

  5. Empirical Results – 1 • Wages increase with years married • According to productivity hypothesis, men become more productive over time • 2.3% per year in the early years of marriage 1 to 2% per year at the mean of years married • Evidence for productivity hypothesis

  6. Empirical Results – 2 • No correlation between wage premium and years married • Pure intercept shift, 5 to 7% Wage premium does not vary with years married • Evidence for selection hypothesis • Different results for the same test?

  7. Empirical Results – 3 • Wage premium for divorced/separated men • Human capital has been accumulated while married, and depreciates after divorce/separation • Divorced or separated men earn 6.6% more than never-married men Men who divorce experience a 2% wage decrease • Evidence for productivity hypothesis

  8. Empirical Results – 4 • Unmarried high-earning men more likely to marry? • If selection hypothesis were true, single men with relative high wage growth in a period should be more likely to marry thereafter • Such an effect has not been found • Evidence for productivity hypothesis

  9. Empirical Results – 5 • Marriage makes self-employed men worse off? • Findings do not reveal any clear pattern Reported results include positive, negative, and no effects. • Again, different conclusions for the same test

  10. Declining Marriage Wage Premium • Earnings premium declined by 40% during the 1980s • 3% wage increase during the early years of marriage in the 1970s • Almost no wage growth after marriage in the 1990s • Two competing explanations for this decline: • Changes in the selection of high-wage men into marriage • Changes in the productivity effects of marriage due to declining specialization within households

  11. TWO COMPETING EXPLANATIONS… • Changes in the selection of high-wage men into marriage • 1989-1993 period, return to years married disappeared • A fall in the productivity-enhancing attributes of marriage • Unobserved ability became correlated with years married • Changes in the productivity effects of marriage • Mean market hours worked by wives: 15 hours in 1976, 28 hours in 1989 • If productivity hypothesis holds, this could dampen the return to marriage for men

  12. Problems with the Empirical Tests • Married women’s labor supply is a crude measure of the degree of specialization within households. • Third hypothesis, employer favoritism, cannot be ruled out. • Important differences among those who are not currently married (divorced, separated, widowed). • Substantial variation among countries

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