Advanced Search
MyIDEAS: Login to save this paper or follow this series

Love and Money: A Theoretical and Empirical Analysis of Household Sorting and Inequality

Contents:

Author Info

  • Raquel Fernandez
  • Nezih Guner
  • John Knowles

Abstract

This paper examines the interactions between household matching, inequality, and per capita income. We develop a model in which agents decide whether to become skilled or unskilled, form households, consume and have children. We show that the equilibrium sorting of spouses by skill type (their correlation in education) is increasing as a function of the skill premium. In the absence of perfect capital markets, the economy can converge to different steady states, depending upon initial conditions. The degree of marital sorting, wage inequality, and fertility differentials are positively correlated across steady states and negatively correlated with per capita income. We use household surveys from 34 countries to construct several measures of the skill premium and of the degree of correlation of spouses' education (marital sorting). For all our measures, we find a positive and significant relationship between the two variables.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w8580.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8580.

as in new window
Length:
Date of creation: Nov 2001
Date of revision:
Publication status: published as Fernandez, Raquel, Nezih Guner and John Knowles. "Love And Money: A Theoretical And Empirical Analysis Of Household Sorting And Inequality," Quarterly Journal of Economics, 2005, v120(1,Feb), 273-344.
Handle: RePEc:nbr:nberwo:8580

Note: EFG
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers, Center for International Development at Harvard University 42, Center for International Development at Harvard University.
  2. Easterly, William, 2001. " The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, Springer, vol. 6(4), pages 317-35, December.
  3. S. Rao Aiyagari & Jeremy Greenwood & Nezih Guner, 2000. "On the State of the Union," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(2), pages 213-244, April.
  4. Greenwood, J. & Guner, N. & Knkwles, J., 1999. "More on Marriage, Fertility, and the Distribution of Income," Papers, London School of Economics - Centre for Labour Economics 9904, London School of Economics - Centre for Labour Economics.
  5. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  6. Dahan, Momi & Gaviria, Alejandro, 2001. "Sibling Correlations and Intergenerational Mobility in Latin America," Economic Development and Cultural Change, University of Chicago Press, vol. 49(3), pages 537-54, April.
  7. Ann L. Owen & David N. Weil, 1997. "Intergenerational Earnings Mobility, Inequality, and Growth," NBER Working Papers 6070, National Bureau of Economic Research, Inc.
  8. Daniel Chen & Michael Kremer, 1999. "Income-Distribution Dynamics with Endogenous Fertility," American Economic Review, American Economic Association, American Economic Association, vol. 89(2), pages 155-160, May.
  9. Roland Benabou, 1993. "Heterogeneity, Stratification, and Growth," NBER Working Papers 4311, National Bureau of Economic Research, Inc.
  10. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, American Economic Association, vol. 86(3), pages 374-87, June.
  11. Ted Bergstrom, 1995. "A Survey of Theories of the Family," Papers _027, University of Michigan, Department of Economics.
  12. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
  13. Boulier, Bryan L & Rosenzweig, Mark R, 1984. "Schooling, Search, and Spouse Selection: Testing Economic Theories of Marriage and Household Behavior," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 92(4), pages 712-32, August.
  14. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
  15. Kremer, M., 1996. "How Much Does Sorting Increase Inequality?," Working papers 96-18, Massachusetts Institute of Technology (MIT), Department of Economics.
  16. Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
  17. David Lam, 1988. "Marriage Markets and Assortative Mating with Household Public Goods: Theoretical Results and Empirical Implications," Journal of Human Resources, University of Wisconsin Press, vol. 23(4), pages 462-487.
  18. Raquel Fernandez, 2001. "Education, Segregation and Marital Sorting: Theory and an Application to UK Data," NBER Working Papers 8377, National Bureau of Economic Research, Inc.
  19. Perotti, Roberto, 1996. " Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, Springer, vol. 1(2), pages 149-87, June.
  20. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, Econometric Society, vol. 49(4), pages 843-67, June.
  21. Burdett, Ken & Coles, Melvyn G, 1997. "Marriage and Class," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(1), pages 141-68, February.
  22. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, American Economic Association, vol. 90(5), pages 1160-1183, December.
  23. Laitner, John, 1979. "Household Bequests, Perfect Expectations, and the National Distribution of Wealth," Econometrica, Econometric Society, Econometric Society, vol. 47(5), pages 1175-93, September.
  24. Fernandez, Raquel & Rogerson, Richard, 1998. "Public Education and Income Distribution: A Dynamic Quantitative Evaluation of Education-Finance Reform," American Economic Review, American Economic Association, American Economic Association, vol. 88(4), pages 813-33, September.
  25. Kremer, Michael & Chen, Daniel L, 2002. " Income Distribution Dynamics with Endogenous Fertility," Journal of Economic Growth, Springer, Springer, vol. 7(3), pages 227-58, September.
  26. Dahan, M & Tsiddon, D, 1996. "Demographic Transition, Income Distribution and Economic Growth," Papers, Tel Aviv - the Sackler Institute of Economic Studies 42-96, Tel Aviv - the Sackler Institute of Economic Studies.
  27. Ljungqvist, Lars, 1993. "Economic underdevelopment : The case of a missing market for human capital," Journal of Development Economics, Elsevier, Elsevier, vol. 40(2), pages 219-239, April.
  28. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(6), pages 1153-89, December.
  29. Pissarides, Christopher A, 1982. "From School to University: The Demand for Post-Compulsory Education in Britain," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 92(367), pages 654-67, September.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. Canadian Macro Study Group

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:8580. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.