Empirical analysis of the effects of increasing wage inequalities on marriage behaviors in Japan

This study examines the effects of inequalities in the lower, rather than the upper, tail of wage distribution due to a declining labor market on marriage behaviors based on gender in Japan. I apply a median-preserving spread to a marriage search model and then empirically analyze the theoretical hypothesis for cross-gender marriage behaviors using extensive individual Japanese data from the Employment Status Survey. The theoretical and empirical results show that gender wage inequalities in the lower and upper tails have positive and statistically significant effects on increasing the probability of unmarried people among both genders. On the other hand, an increase in male non-standard employment and unemployment rates have positive and significant effects on the probability of unmarried women, even after controlling with wage inequality indices. In addition, the median wage for women has a significant and negative effect on the probability of unmarried men. These results highlight the need for policies to promote a shift from male non-standard to standard employment and increased wages in the lower income class to raise marriage rates for both genders.