Equilibria in a model with a search labour market and a matching marriage market
I analyse an economy where a search labour market and a matching marriage market interact. The economy is populated by homogeneous workers, firms and marriage partners (MPs). Workers simultaneously search for firms in order to work and for MPs in order to marry. Firms post wages to attract workers. MPs look for workers in order to marry. I assume that married workers receive a pre-determined flow utility, and married MPs derive flow utility equal to the worker's earnings. This provides the link between the markets. Noisy search in the labour market generates a distribution of wages. I show that the so called married wage premium can be the consequence of frictions in both markets, without having to resort to the typical explanations. In one equilibrium, MPs marry all workers, regardless of their employment status. In a more interesting equilibrium, MPs marry only high earners, while workers accept wages that render them "unmarriageable". The workers' reservation wage must compensate them for the loss of marriageability in addition to the option of continued search for better wages. This affects the distributions of wages offered and earned, which are crucial in the MPs decision to marry/reject low earners.
|Date of creation:||12 Feb 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenneth Burdett & Ricardo Lagos & Randall Wright, 2002.
"Crime, Inequality, and Unemployment, Second Version,"
PIER Working Paper Archive
03-029, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Sep 2003.
- David S. Loughran, 2002. "The Effect Of Male Wage Inequality On Female Age At First Marriage," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 237-250, May.
- Burdett, Kenneth & Judd, Kenneth L, 1983. "Equilibrium Price Dispersion," Econometrica, Econometric Society, vol. 51(4), pages 955-69, July.
- Donna Ginther & Madeline Zavodny, 1998.
"Is the male marriage premium due to selection? The effect of shotgun weddings on the return to marriage,"
FRB Atlanta Working Paper No.
97-5, Federal Reserve Bank of Atlanta.
- Donna K. Ginther & Madeline Zavodny, 2001. "Is the male marriage premium due to selection? The effect of shotgun weddings on the return to marriage," Journal of Population Economics, Springer, vol. 14(2), pages 313-328.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:15881. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.