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Testing Becker's Theory of Positive Assortative Matching

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Author Info
Aloysius Siow
Abstract

In a static frictionless transferable utilities bilateral matching market with systematic and idiosyncratic payoffs, supermodularity of the match output function implies a strong form of positive assortative matching: The equilibrium matching distribution has all positive local log odd ratios or totally positive of order 2 (TP2). A strong form of a preference for own type implies supermodularity of the match output function. It has additional restrictions on local odds ratios. Local odds ratios are not informative on whether a bilateral matching market equilibrates with or without transfers. Using white married couples in their thirties from the US 2000 census, spousal educational matching obeyed TP2 except for less than 0.2% of marriages with extreme spousal educational disparities. Using the TP2 order, there were more positive assortative matching by couples living in SMSA's than those who do not; but not more positive assortative matching in 2000 than in 1970. There were increases in specific local log odds over that period.

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Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-356.

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Length: 38 pages
Date of creation: 15 Apr 2009
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Handle: RePEc:tor:tecipa:tecipa-356

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Related research
Keywords: matching; marriage; education; local log odds; TP2; United States;

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Find related papers by JEL classification:
J1 - Labor and Demographic Economics - - Demographic Economics
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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  1. 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. [Downloadable!] (restricted)
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  5. Aloysius Siow, 2008. "How does the marriage market clear? An empirical framework," Canadian Journal of Economics, Canadian Economics Association, vol. 41(4), pages 1121-1155, November. [Downloadable!] (restricted)
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  6. Dagsvik, John K, 2000. "Aggregation in Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 27-57, February.
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  7. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
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  8. Liu, Haoming & Lu, Jingfeng, 2006. "Measuring the degree of assortative mating," Economics Letters, Elsevier, vol. 92(3), pages 317-322, September. [Downloadable!] (restricted)
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  12. Michael Peters & Aloysius Siow, 2002. "Competing Premarital Investments," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 592-608, June. [Downloadable!] (restricted)
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  13. Robert Shimer & Lones Smith, 2000. "Assortative Matching and Search," Econometrica, Econometric Society, vol. 68(2), pages 343-370, March.
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  14. Takemi Yanagimoto & Masashi Okamoto, 1969. "Partial orderings of permutations and monotonicity of a rank correlation statistic," Annals of the Institute of Statistical Mathematics, Springer, vol. 21(1), pages 489-506, December. [Downloadable!] (restricted)
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  16. Patrick Legros & Andrew F. Newman, 2007. "Beauty Is a Beast, Frog Is a Prince: Assortative Matching with Nontransferabilities," Econometrica, Econometric Society, vol. 75(4), pages 1073-1102, 07. [Downloadable!] (restricted)
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  17. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug.. [Downloadable!] (restricted)
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  18. Alp E. Atakan, 2006. "Assortative Matching with Explicit Search Costs," Econometrica, Econometric Society, vol. 74(3), pages 667-680, 05. [Downloadable!] (restricted)
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  19. Murat Iyigun & Randall P. Walsh, 2007. "Building the Family Nest: Premarital Investments, Marriage Markets, and Spousal Allocations," Review of Economic Studies, Blackwell Publishing, vol. 74(2), pages 507-535, 04. [Downloadable!] (restricted)
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  20. Wolak, Frank A., 1989. "Testing inequality constraints in linear econometric models," Journal of Econometrics, Elsevier, vol. 41(2), pages 205-235, June. [Downloadable!] (restricted)
  21. Maristella Botticini & Aloysius Siow, 2008. "Are there Increasing Returns in Marriage Markets?," Working Papers tecipa-333, University of Toronto, Department of Economics. [Downloadable!]
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