An aggregate economic value perspective on Korea’s marriage decline: transitory and secular

Marriage rates in Korea have been declining at an unprecedented pace in the recent two decades. Drawing on the classical economic theory of marriage as a rational choice, we compute local aggregate economic values of prime-age working men and women to examine the relationship between the relative values of men and marriage rates. The relative values of men fell dramatically by 40% during this period, undermining the economic justification of marriage under unequal allocation of housework. The two-way fixed effects estimation using region-year transitory variations shows that a 1% decrease in the relative values of men was associated with a 0.088% decrease in marriage rates. To explain the precipitous convergence of economic values between the two genders, we decompose the changes in the relative values into four components – (gender-neutral) structural changes, (gender-specific) industrial segregation, (gender-neutral) wage growth, and (gender-specific) wage gaps within industries – to measure their contributions to secular marriage decline. In the 2000s, both the alleviated industrial segregation and the structural changes toward industries with higher female proportions played a major role. On the other hand, the impact of reduced gender wage gaps within industries also became prominent in the 2010s.