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Sources of Change in the Life-Cycle Decisions of American Men and Women: 1962-2014

Listed author(s):
  • Zvi Eckstein

    (Tiomkin School of Economics, IDC Herzliya)

  • Michael P. Keane

    ()

    (University of Oxford)

  • Osnat Lifshitz

    (Tiomkin School of Economics, IDC Herzliya)

We study life-cycle decisions of five cohorts of American men and women born from the 1930s to the 1970s in a unified econometric framework applied to CPS data. The men and women in our model make individual decisions when single, joint decisions when married, and interact in a marriage market. Our model succeeds in explaining differences across cohorts in several key endogenous variables (i.e., education, work, marriage/divorce and fertility). We explain these changes using shifts in five exogenous factors: parental education, the distribution of potential partners, divorce laws, the wage/job offer distribution, and birth control technology. A major change between the 1935 and 1975 cohorts is that the female “marriage wage premium” rose from -10% to +7%. We find that changes in the selection of women into marriage explain 75% of this change. Married women of recent cohorts have much higher observed and unobserved skills compared both to unmarried women and the married women of past cohorts.

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File URL: https://www.nuffield.ox.ac.uk/economics/papers/2016/SCLCD.pdf
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Paper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number 2016-W07.

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Length: 58 pages
Date of creation: 07 Jun 2016
Handle: RePEc:nuf:econwp:1607
Contact details of provider: Web page: https://www.nuffield.ox.ac.uk/economics/

References listed on IDEAS
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