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Income Inequality and Marriage

Author

Listed:
  • Myeong Hwan Kim

    () (State University of New York at New Paltz)

  • Soung Chan Lee

    () (Plymouth State University)

  • Kwang Woo Park

    () (Minnesota State University, Mankato)

Abstract

This study examines the extent to which changes in household formation exacerbated income inequality in the United States during the last two generations. Using a time-varying parameter model, the impact on how marriage decisions, changes in human capital, and fertility choices influence inequality are estimated. The estimation results show that marital sorting evolves over time and positively and increasingly affects the degree of income inequality and intergenerational human capital transmission induces path-dependent income distribution dynamics. This suggests that intrahousehold choices explain a substantial proportion of income distribution dynamics.

Suggested Citation

  • Myeong Hwan Kim & Soung Chan Lee & Kwang Woo Park, 2007. "Income Inequality and Marriage," Economics Bulletin, AccessEcon, vol. 15(20), pages 1-12.
  • Handle: RePEc:ebl:ecbull:eb-07o10035
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    References listed on IDEAS

    as
    1. Kim, Chang-Jin & Nelson, Charles R, 1989. "The Time-Varying-Parameter Model for Modeling Changing Conditional Variance: The Case of the Lucas Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 7(4), pages 433-440, October.
    2. Michael Kremer, 1997. "How Much does Sorting Increase Inequality?," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 115-139.
    3. Raquel Fernández & Nezih Guner & John Knowles, 2005. "Love and Money: A Theoretical and Empirical Analysis of Household Sorting and Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 273-344.
    4. Fernandez, Raquel & Rogerson, Richard, 1998. "Public Education and Income Distribution: A Dynamic Quantitative Evaluation of Education-Finance Reform," American Economic Review, American Economic Association, vol. 88(4), pages 813-833, September.
    5. Raquel Fernández & Richard Rogerson, 2001. "Sorting and Long-Run Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1305-1341.
    6. Daniel Chen & Michael Kremer, 1999. "Income-Distribution Dynamics with Endogenous Fertility," American Economic Review, American Economic Association, vol. 89(2), pages 155-160, May.
    7. 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.
    8. Bjorklund, Anders & Jantti, Markus, 1997. "Intergenerational Income Mobility in Sweden Compared to the United States," American Economic Review, American Economic Association, vol. 87(5), pages 1009-1018, December.
    9. Kremer, Michael & Chen, Daniel L, 2002. "Income Distribution Dynamics with Endogenous Fertility," Journal of Economic Growth, Springer, vol. 7(3), pages 227-258, September.
    10. Ozdural, Sanem, 1993. "Intergenerational mobility : A comparative study between Turkey and the United States," Economics Letters, Elsevier, vol. 43(2), pages 221-230.
    11. 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 537-554, April.
    12. 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, vol. 87(6), pages 1153-1189, December.
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    More about this item

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • J1 - Labor and Demographic Economics - - Demographic Economics

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