Using the Australian Bureau of Statistics’ Survey of Income and Household Costs, this paper explores the effect of changing assortative mating patterns on income inequality. Evidence from theoretical and mathematically calibrated models suggest that assortative mating has distributional implications for measurable traits, which include income. Using a semi-parametric conditional weighted kernel density estimation framework we analyse the effect of assortative mating on the distribution of income in Australia. In controlling for labour force participation, family characteristics, education and other demographic variables, we find some evidence to suggest that assortative mating has had an influence on the increase in income inequality in the 17 years to 2003. The results are robust to several changes in specification.
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Paper provided by Centre for Economic Policy Research, Research School of Social Sciences, Australian National University in its series CEPR Discussion Papers with number
538.
Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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