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“Why Not Settle Down Already?” A Quantitative Analysis of the Delay in Marriage

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  • Santos, Cezar
  • Weiss, David

Abstract

One of the most striking changes in American society in the last forty years has been the decline and delay in marriage. The fraction of young men and women who have never been married increased significantly between 1970 and 2000. Idiosyncratic labor income volatility also increased over the same period. This paper establishes a quantitatively important link between these two facts. Specifically, if marriage involves consumption commitments, then a rise in income volatility results in a delay in marriage. Marriage, however, also allows for diversification of income risk since earnings fluctuations between spouses need not be perfectly correlated. We assess the hypothesis that rising income volatility contributed to the delay in marriage vis-à-vis other explanations in the literature, using an estimated equilibrium search model of the marriage market. We find that the increase in volatility accounts for about 26% of the observed delay in marriage. Thus, we find that the effects of consumption commitments due to increased income volatility outweigh the effects of the insurance gains provided by spouses.

Suggested Citation

  • Santos, Cezar & Weiss, David, 2014. "“Why Not Settle Down Already?” A Quantitative Analysis of the Delay in Marriage," Foerder Institute for Economic Research Working Papers 275796, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275796
    DOI: 10.22004/ag.econ.275796
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    1. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2010. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 15-51, January.
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    Cited by:

    1. repec:wly:iecrev:v:60:y:2019:i:3:p:1263-1290 is not listed on IDEAS
    2. Nawid Siassi, 2019. "Inequality and the Marriage Gap," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 160-181, January.
    3. Marcel Fischer & Natalia Khorunzhina, 2019. "Housing Decision With Divorce Risk," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(3), pages 1263-1290, August.
    4. Jeremy Greenwood & Nezih Guner & Karen A. Kopecky, 2019. "The Wife's Protector: A Quantitative Theory Linking Contraceptive Technology with the Decline in Marriage," Economie d'Avant Garde Research Reports 31, Economie d'Avant Garde.
    5. repec:bla:obuest:v:80:y:2018:i:6:p:1089-1116 is not listed on IDEAS
    6. Pavel Jelnov, 2018. "A New Estimator of Search Duration and Its Application to the Marriage Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 80(6), pages 1089-1116, December.
    7. repec:kea:keappr:ker-20180101-34-1-05 is not listed on IDEAS
    8. Nezih Guner & Christopher Rauh & Elizabeth Caucutt, 2017. "Is Marriage for White People? Incarceration and the Racial Marriage Divide," 2017 Meeting Papers 779, Society for Economic Dynamics.
    9. Sommer, Kamila, 2016. "Fertility choice in a life cycle model with idiosyncratic uninsurable earnings risk," Journal of Monetary Economics, Elsevier, vol. 83(C), pages 27-38.

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