Partner Choice and the Marital College Premium
Several theoretical contributions have argued that the returns to schooling within marriage play a crucial role for human capital investments. Our paper quantifies the evolution of these returns over the last decades. We consider a frictionless matching framework á la Becker-Shapley-Shubik, in which the gain generated by a match between two individuals is the sum of a systematic effect that only depends on the spouses' education classes and a match-specific term that we treat as random; following Choo and Siow (2006), we assume the latter component has an additively separable structure. We derive a complete, theoretical characterization of the model. We show that if the supermodularity of the surplus function is invariant over time and errors have extreme value distributions with time-invariant but education-dependent variances, the model is overidentified. We apply our method to US data on individuals born between 1943 and 1972. Our model fits the data very closely; moreover, we find that the deterministic part of the surplus is indeed supermodular and that, in line with theoretical predictions, the "marital college premium" has increased for women but not for men over the period.
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