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Job Turnover, Wage Rates, and Marital Stability: How Are They Related?

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Author Info

  • Ahituv, Avner

    ()
    (University of Haifa)

  • Lerman, Robert I.

    ()
    (Urban Institute)

Abstract

This study examines the interplay between job stability, wage rates, and marital instability. We use a Dynamic Selection Control model in which young men make sequential choices about work and family. Our empirical estimates derived from the model account for self-selection, simultaneity and unobserved heterogeneity. The results capture how job stability affects earnings, how both affect marital status, and how marital status affects earnings and job stability. The study reveals robust evidence that job instability lowers wages and the likelihood of getting and remaining married. At the same time, marriage raises wages and job stability. To project the sequential effects linking job stability, marital status, and earnings, we simulate the impacts of shocks that raise preferences for marriage and that increase education. Feedback effects cause the simulated wage gains from marriage to cumulate over time, indicating that long-run marriage wage premiums exceed conventional short-run estimates.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1470.

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Length: 51 pages
Date of creation: Jan 2005
Date of revision:
Publication status: published in: Review of Economics of the Household, 2011, 9 (2), 221-249
Handle: RePEc:iza:izadps:dp1470

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Keywords: wage rates; marriage and marital dissolution; job turnover; panel data;

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References

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  1. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-87, December.
  2. V. Joseph Hotz & Lixin Xu & Marta Tienda & Avner Ahituv, 1999. "Are There Returns to the Wages of Young Men from Working While in School?," JCPR Working Papers 101, Northwestern University/University of Chicago Joint Center for Poverty Research.
  3. David Neumark, 2002. "Youth Labor Markets In The United States: Shopping Around Vs. Staying Put," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 462-482, August.
  4. Weiss, Yoram & Willis, Robert J, 1997. "Match Quality, New Information, and Marital Dissolution," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages S293-329, January.
  5. Claudia Goldin, 1990. "Understanding the Gender Gap: An Economic History of American Women," NBER Books, National Bureau of Economic Research, Inc, number gold90-1, June.
  6. Kerwin Kofi Charles & Melvin Stephens Jr., 2001. "Job Displacement, Disability, and Divorce," NBER Working Papers 8578, National Bureau of Economic Research, Inc.
  7. Wendy Manning & Pamela Smock, 1995. "Why marry? Race and the transition to marriage among cohabitors," Demography, Springer, vol. 32(4), pages 509-520, November.
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  9. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S76-S108, Part II, .
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  13. Chun, Hyunbae & Lee, Injae, 2001. "Why Do Married Men Earn More: Productivity or Marriage Selection?," Economic Inquiry, Western Economic Association International, vol. 39(2), pages 307-19, April.
  14. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
  15. Audrey Light & Kathleen McGarry, 1998. "Job Change Patterns And The Wages Of Young Men," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 276-286, May.
  16. Jacob Mincer & Solomon Polacheck, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 397-431 National Bureau of Economic Research, Inc.
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  19. David Neumark, 2000. "Changes in Job Stability and Job Security: A Collective Effort to Untangle, Reconcile, and Interpret the Evidence," NBER Working Papers 7472, National Bureau of Economic Research, Inc.
  20. Yu Xie & James Raymo & Kimberl Goyette & Arland Thornton, 2003. "Economic potential and entry into marriage and cohabitation," Demography, Springer, vol. 40(2), pages 351-367, May.
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Citations

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Cited by:
  1. Lia Pacelli & Silvia Pasqua & Claudia Villosio, 2007. "What Does the Stork Bring to Women’s Working Career?," LABORatorio R. Revelli Working Papers Series 58, LABORatorio R. Revelli, Centre for Employment Studies.
  2. Claire M. Kamp Dush & Kate S. Adkins, 2009. "The Mental Health Of Mothers And Fathers Before And After Cohabitation And Marital Dissolution," Working Papers 1134, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing..
  3. Svarer, Michael, 2008. "Crime and Partnerships," IZA Discussion Papers 3543, Institute for the Study of Labor (IZA).
  4. Avner Ahituv & Robert Lerman, 2007. "How do marital status, work effort, and wage rates interact?," Demography, Springer, vol. 44(3), pages 623-647, August.
  5. Lundberg, Shelly, 2005. "Men and islands: Dealing with the family in empirical labor economics," Labour Economics, Elsevier, vol. 12(4), pages 591-612, August.

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