Does marriage pay more than cohabitation?

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -Empirical research has unambiguously shown that married men receive higher wages than unmarried, whereas a wage premium for cohabiters is not as evident yet. This paper aims to exploit the observed difference between the marital and the cohabiting wage premium in Germany to draw conclusions about the sources, typically explained by specialisation (e.g. husbands being more productive because their wives take over household chores) or selection (high earnings potentials being more attractive on the marriage market). Design/methodology/approach -The paper analyzes the cohabiting and the marital wage premium in Germany using a shifting panel design for marriages and move-ins from 1993 to 2004 in the German Socio-Economic Panel. With non-parametric matching models men who get married (treatment group I) are matched with cohabiting respectively single men (control groups) and men who move in with a partner (treatment group II) with singles. Findings -Matching reveals that higher wages are mostly due to positive selection -into marriage as well as into cohabitation. Supplementary analysis of intra-household time use suggests that specialization, if any, is part of the selection process from single to cohabitation to marriage. Originality/value -This is the first application of non-parametric matching in a comparative study of the marital and the cohabiting wage premium and thus provides new insights into their respective sources. It is also the first investigation of family-status-related wage premiums in Germany.

Does "Sorting into Specialization" Explain the Differences in Time Use between Married and Cohabiting Couples? An Empirical Application for Germany

“…In contrast to this, more homogenous spouses in terms of education, wage income and time use are less likely to get married. This result not only supports our selection hypothesis, it also gives grounds to the previous finding of a virtually non-existing wage differential (when accounting for selection) between married and cohabiting men (Barg and Beblo 2009). The results of the present paper confirm that specialization plays a particularly important part in the selection process from cohabitation to marriage -at least in a country like Germany where institutions impose strongly different incentives depending on the family status.…”

“…More recent economic and sociological literature mentions an additional explanation for specialization differences between married and cohabiting couples. It is argued that institutional differences between marriage and cohabitation, such as joint taxation for married couples, promote specialization particularly within marriage (El Lagha and Morau, 2007;Barg and Beblo, 2009). For the purpose of testing the impact of cultural-institutional differences, Ono and…”

“…In the German Socio-Economic Panel (GSOEP), a man who got married in the preceding year receives a 13 percent higher wage rate than a man who stayed single, whereas moving in with a partner is reflected in a cohabiting premium of 6.7 percent in the subsequent year (Barg and Beblo, 2009). The same data set reveals remarkable differences in the time use of married and cohabiting couples, suggesting a higher level of household specialization after marriage: For instance, the intra-household difference in paid working hours within married couples more than doubles the difference within cohabiting couples (4 versus 1.7 more hours spent on employment by the male partners) 2 .…”

Wage Premium and Wage Penalty in Marriage versus Cohabitation

“…Using a fixed-effects regression, Stratton [2002] finds that, in the United States, cohabitation -that is, the status itself or its duration -is not associated with a statistically significant male wage premium. Using analysis based on propensity score matching, Barg & Beblo [2009] show that, in Germany, the apparent male wage premium for cohabitation (which is smaller than the marriage premium) is the result of a selection effect similar to that associated with marriage. The estimations of Bardasi & Taylor [2008] on British data are more ambiguous, since they find a similar wage premium associated with cohabitation and marriage when the domestic work of the spouse is taken into account.…”

Latent variables and propensity score matching: a simulation study with application to data from the Programme for International Student Assessment in Poland

“…For example, in evaluation studies in Germany researchers very often use data from the German Socio-Economic Panel (GSOEP) which contain information on attitudes or personality traits which can be used by researchers in propensity score matching (for examples see Lechner 2000;Barg and Beblo 2009;Heineck and Anger 2010). In educational studies, a number of works demonstrate the importance of student attitudes or latent family characteristics (OECD 2009;Jakubowski and Pokropek 2009).…”