American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Household Search and the Marital Wage Premium
American Economic Journal: Macroeconomics
vol. 13,
no. 4, October 2021
(pp. 55–109)
(Complimentary)
Abstract
We develop a model where selection into marriage and household search generate a marital wage premium. Beyond selection, married individuals earn higher wages for two reasons. First, income pooling within a joint household raises risk-averse individuals' reservation wages. Second, married individuals climb the job ladder faster, as they internalize that higher wages increase their partner's selectivity over offers. Specialization according to comparative advantage in search generates a premium that increases in spousal education, as in the data. Quantitatively, household search explains 10–33 percent and 20–58 percent of the premium for males and females, respectively, and accounts for its increase with spousal education.Citation
Pilossoph, Laura, and Shu Lin Wee. 2021. "Household Search and the Marital Wage Premium." American Economic Journal: Macroeconomics, 13 (4): 55–109. DOI: 10.1257/mac.20180092Additional Materials
JEL Classification
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
- J16 Economics of Gender; Non-labor Discrimination
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- J64 Unemployment: Models, Duration, Incidence, and Job Search
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