Re-Visiting the Easterlin Hypothesis: Marriage in the U.S. 1968-2010
This study tests the effect of relative income – younger people's earning potential relative to their aspirations, as approximated by older families' income – on the proportions married, by sex, in the first fifteen years out of school. It finds that relative income has become a better measure to use, than relative cohort size, because of a disconnect that has developed between the two as a result of rising female labor force participation among older women that has inflated older families’ income faster than older men's earnings. The results are highly supportive of the Easterlin relative income hypothesis, finding a dominant negative effect of older family income that extends due to postponement effects even into groups 11-15 years out of school. But in addition it finds a strong but changing effect of the female wage: positive among women 0-5 years out of school, although slowly declining over time, but negative among the older women with a dominant positive time trend that has produced a positive effect in the last decade. The elasticity with respect to older family income suggests that it was responsible for 16% of the observed decline in the proportion of women 0-5 years out of school who were married, and 23% of the proportion for the men in the same group. There is in addition, however, a very strong negative time trend.
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References listed on IDEAS
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- Finis Welch, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," UCLA Economics Working Papers 146, UCLA Department of Economics.
- Grossbard-Shechtman, Shoshana Amyra, 1984. "A Theory of Allocation of Time in Markets for Labour and Marriage," Economic Journal, Royal Economic Society, vol. 94(376), pages 863-82, December.
- Tara Watson & Sara McLanahan, 2010.
"Marriage Meets the Joneses: Relative Income, Identity, and Marital Status,"
Department of Economics Working Papers
2010-06, Department of Economics, Williams College.
- Tara Watson & Sara McLanahan, 2011. "Marriage Meets the Joneses: Relative Income, Identity, and Marital Status," Journal of Human Resources, University of Wisconsin Press, vol. 46(3), pages 482-517.
- Tara Watson & Sara McLanahan, 2009. "Marriage Meets the Joneses: Relative Income, Identity, and Marital Status," NBER Working Papers 14773, National Bureau of Economic Research, Inc.
- Welch, Finis, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S65-97, October.
- Simon Burgess & Carol Propper & Arnstein Aassve, 2003.
"The role of income in marriage and divorce transitions among young Americans,"
Journal of Population Economics,
European Society for Population Economics, vol. 16(3), pages 455-475, 08.
- Simon Burgess & Carol Propper & Arnstein Aassve, 2002. "The role of income in marriage and divorce transitions among young Americans," MPIDR Working Papers WP-2002-022, Max Planck Institute for Demographic Research, Rostock, Germany.
- Robert McNown & Sameer Rajbhandary, 2003. "Time series analysis of fertility and female labor market behavior," Journal of Population Economics, European Society for Population Economics, vol. 16(3), pages 501-523, 08.
- Gould, Eric D. & Paserman, M. Daniele, 2003.
"Waiting for Mr. Right: rising inequality and declining marriage rates,"
Journal of Urban Economics,
Elsevier, vol. 53(2), pages 257-281, March.
- Gould, Eric D & Paserman, M. Daniele, 2002. "Waiting for Mr Right: Rising Inequality and Declining Marriage Rates," CEPR Discussion Papers 3388, C.E.P.R. Discussion Papers.
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