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Why Not Settle Down Already? A Quantitative Question

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  • David Weiss

    (University of Pennsylvania)

  • Cezar Santos

    (University of Pennsylvania)

Abstract

One of the most striking changes in American society over the last 40 years has been the decline and delay in marriage. The fraction of young men and women who have never been married has steadily and significantly increased since before 1970. The economics literature has also noted a rise in labor market volatility over this period. The first contribution of this paper is that we propose a new hypothesis: that these two events are linked. Specifically, if marriage involves consumption commitments, then a rise in volatility in income processes could result in a delay in marriage. The second contribution is to assess this new hypothesis vis-à-vis others in the literature, using an estimated structural model. We find that the decrease in the price of home inputs explains a little over a third of the data. The decrease in the gender wage gap explains a third of the data. Rising income volatility explains a little under a third of the data. All three of these stories are needed in order to provide a satisfactory explanation to the question of why young adults are delaying marriage.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 921.

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Date of creation: 2011
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Handle: RePEc:red:sed011:921

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  1. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2009. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States, 1967-2006," NBER Working Papers 15483, National Bureau of Economic Research, Inc.
  2. Orazio Attanasio & Hamish Low & Virginia Sanchez-Marcos, 2008. "Explaining Changes in Female Labor Supply in a Life-Cycle Model," American Economic Review, American Economic Association, vol. 98(4), pages 1517-52, September.
  3. Betsey Stevenson & Justin Wolfers, 2007. "Marriage and Divorce: Changes and their Driving Forces," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 27-52, Spring.
  4. Andrew Postlewaite & Larry Samuelson & Dan Silverman, 2008. "Consumption Commitments and Employment Contracts," Review of Economic Studies, Oxford University Press, vol. 75(2), pages 559-578.
  5. Raj Chetty & Adam Szeidl, 2006. "Consumption Commitments and Risk Preferences," NBER Working Papers 12467, National Bureau of Economic Research, Inc.
  6. Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
  7. Fatih Karahan & Serdar Ozkan, 2009. "On the Persistence of Income Shocks over the Life Cycle: Evidence and Implications, Second Version," PIER Working Paper Archive 10-012, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 05 Apr 2010.
  8. Dirk Krueger & Fabrizio Perri, 2006. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory -super-1," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 163-193.
  9. Edlund, Lena Cecilia & Machado, Cecilia, 2009. "Marriage and Emancipation in The Age of The Pill," CEPR Discussion Papers 7485, C.E.P.R. Discussion Papers.
  10. Jose-Victor Rios-Rull & Jacob Short & Ferdinando Regalia, 2010. "What Accounts for the Increase in the Number of Single Households?," 2010 Meeting Papers 995, Society for Economic Dynamics.
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