Marriage premium or penalty? It depends

Published: Saturday, March 3 2012 9:21 a.m. MST

Marriage and associated cohabitation is usually praised as being an economic deal. And for many things — from rent to spousal support to insurance — it is. But for an individual's income, it is less clear.

While married men make on average 44 percent more than single men, married women make 10 percent less than single women, according to survey data from the Bureau of Labor Statistics.

There are three economic concepts that might be affecting the results of a premium or penalty for married people, according to Bryan Caplan, an economist at George Mason University and writer at the popular economics blog Econlog.

First, an ability bias might mean there is some self-selection occurring. For example, men with higher incomes may be more likely to get married, in which case the premium for men is smaller than the studies suggest.

"Men who marry are just more conscientious, ambitious and cooperative," Caplan said.

But for women, higher income likely makes it easier for them to find a husband. Caplan belives that adjusting for ability bias for women may mean their marriage penalty is even greater.

Next, becoming married might affect an individual's human capital. For men, becoming married could make them work harder and be more productive.

For women, childbirth and a shifting of career focus might make them less so.

"Once they're married, women want more work-life balance. Some even reallocate their energy from promoting their own careers to promoting their husbands' careers," Caplan said.

Finally, the idea of signaling may play a part. To an employer, unfairly or not, a married man can be seen as more productive and a married woman can be seen as less career focused.

The Federal Reserve Bank of Saint Louis published a report on the male marriage premium in 2002.

"The fact that divorced men earn more on average than those who have never been married seems to discredit the idea that marriage itself causes higher wages," note the authors of a study.

In a 2011 paper from the Institute for the Study of Labor (IZA) in Bonn, Switzerland, authors find a marriage premium even for professional baseball players.

They report a 16 percent gap between the wages of married players and unmarried players.

Get The Deseret News Everywhere

Subscribe

Mobile

RSS