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Why Not Settle Down Already? A Quantitative Question

Author

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  • David Weiss

    (University of Pennsylvania)

  • Cezar Santos

    (University of Pennsylvania)

Abstract

One of the most striking changes in American society over the last 40 years has been the decline and delay in marriage. The fraction of young men and women who have never been married has steadily and significantly increased since before 1970. The economics literature has also noted a rise in labor market volatility over this period. The first contribution of this paper is that we propose a new hypothesis: that these two events are linked. Specifically, if marriage involves consumption commitments, then a rise in volatility in income processes could result in a delay in marriage. The second contribution is to assess this new hypothesis vis-à-vis others in the literature, using an estimated structural model. We find that the decrease in the price of home inputs explains a little over a third of the data. The decrease in the gender wage gap explains a third of the data. Rising income volatility explains a little under a third of the data. All three of these stories are needed in order to provide a satisfactory explanation to the question of why young adults are delaying marriage.

Suggested Citation

  • David Weiss & Cezar Santos, 2011. "Why Not Settle Down Already? A Quantitative Question," 2011 Meeting Papers 921, Society for Economic Dynamics.
  • Handle: RePEc:red:sed011:921
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    File URL: https://economicdynamics.org/meetpapers/2011/paper_921.pdf
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    References listed on IDEAS

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    1. Orazio Attanasio & Hamish Low & Virginia Sánchez-Marcos, 2008. "Explaining Changes in Female Labor Supply in a Life-Cycle Model," American Economic Review, American Economic Association, vol. 98(4), pages 1517-1552, September.
    2. Claudia Goldin & Lawrence F. Katz, 2002. "The Power of the Pill: Oral Contraceptives and Women's Career and Marriage Decisions," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 730-770, August.
    3. Gregory D. Hess, 2004. "Marriage and Consumption Insurance: What's Love Got to Do with It?," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 290-318, April.
    4. Andrew Postlewaite & Larry Samuelson & Dan Silverman, 2008. "Consumption Commitments and Employment Contracts," Review of Economic Studies, Oxford University Press, vol. 75(2), pages 559-578.
    5. Edlund, Lena Cecilia & Machado, Cecilia, 2009. "Marriage and Emancipation in The Age of The Pill," CEPR Discussion Papers 7485, C.E.P.R. Discussion Papers.
    6. 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.
    7. Dirk Krueger & Fabrizio Perri, 2006. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory -super-1," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 163-193.
    8. Betsey Stevenson & Justin Wolfers, 2007. "Marriage and Divorce: Changes and their Driving Forces," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 27-52, Spring.
    9. Fatih Karahan & Serdar Ozkan, 2009. "On the Persistence of Income Shocks over the Life Cycle: Evidence and Implications, Second Version," PIER Working Paper Archive 10-012, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 05 Apr 2010.
    10. Raj Chetty & Adam Szeidl, 2007. "Consumption Commitments and Risk Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 831-877.
    11. Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
    12. Jose-Victor Rios-Rull & Jacob Short & Ferdinando Regalia, 2010. "What Accounts for the Increase in the Number of Single Households?," 2010 Meeting Papers 995, Society for Economic Dynamics.
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    Cited by:

    1. Hye Mi You, 2018. "Marriage, Working Spouses, and Male Wage Volatility," Korean Economic Review, Korean Economic Association, vol. 34, pages 101-115.
    2. Elizabeth Caucutt & Nezih Guner & Christopher Rauh, 2018. "Is Marriage for White People? Incarceration, Unemployment, and the Racial Marriage Divide," Working Papers 2018-074, Human Capital and Economic Opportunity Working Group.
    3. Greenwood, Jeremy & Guner, Nezih & Kopecky, Karen A., 2019. "The Wife's Protector: A Quantitative Theory Linking Contraceptive Technology with the Decline in Marriage," CEPR Discussion Papers 14110, C.E.P.R. Discussion Papers.
    4. 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.
    5. 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.
    6. 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.
    7. 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.

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