Spouse selection and earnings: evidence of marital sorting

MICHAEL A. ZIMMER [*] This article investigates economic bases for individuals' selection of marriage partners. Its central focus is matching of spouse pairs based on unobservable components of hourly earnings. Using a data extract from the Panel Study of Income Dynamics, we have observations of individuals' wages before and immediately after marriage, along with their spouses' earnings after marriage. We exploit the data to estimate the relation between spouses' wage residuals. The evidence supports positive marital matching on the basis of earnings. The results are robust with respect to variations in the statistical framework of the model. (JEL J12) I. INTRODUCTION The process by which marriages are formed has long attracted the attention of social scientists. Research has suggested that individuals choose spouses similar to themselves in physical and social traits, such as height and ethnicity. An area of interest in recent years has been the economic basis of spouse selection. Beginning with Becker (1974), economists focused on earnings characteristics of spouses. Becker argued that, since in most cultures males specialize in market production, spouse selection matches high-wage males with females who specialize in home production and rearing of families. Empirical research on Becker's hypothesis has produced mixed results. In several studies the strategy has been to estimate earnings regressions from samples of existing married couples and then obtain correlations between the ensuing earnings residuals of spouses. The correlations are used as indexes of marital sorting in earnings, after controlling for measured factors such as schooling, age, and work experience. Smith (1979) used census data to estimate residual correlations for black and white couples. He obtained estimates of 0.035 for whites and 0.216 for blacks. Becker (1981) used the 1967 Survey of Economic Opportunity to obtain partial correlations of 0.32 for whites and 0.24 for blacks. Zimmer (1996) examined earnings correlations among low-income marriages. Although his evidence supports Becker's hypothesis of negative assortative mating with respect to wages, the results are not consistent across race groups. Lam (1988) provided an explanation of positive assortative mating with respect to wealth and wages; be also established elasticities of spouses' hours worked and demands for household goods with respect to wages that would produce positive assortative mating. Several recent studies have addressed the apparent earnings premium of married males relative to single males. Nakosteen and Zimmer (1997) and Cornwell and Rupert (1997) argued that married men are observed to earn more than singles because high-earning males possess unobserved traits that make them attractive prospects for marriage. But here, too, the evidence is mixed. Korenmann and Neumark (1991) suggested that married males earn more than singles because marriage tends to make them more productive, thereby enhancing their earnings prospects. These studies have not paid attention to assortative mating per se, focusing instead on earnings of husbands in the single versus married state. The purpose of this study is to return to the issue of spouse matching on the basis of earnings. Our empirical strategy, based on several waves of data from the Panel Study of Income Dynamics (PSID), differs from the articles first cited above by attempting to capture the earnings residual of one spouse prior to marriage and relating it to the residual of his partner in a period shortly after marriage. In this manner we do not rely as heavily on the use of ongoing marriages as in the early studies. The following section describes our statistical approach in more detail. Section III describes the data and specification of the earnings models. Sections IV and V present results of estimation, and section VI concludes the article. Our results provide broad support for the hypothesis of positive assortative mating with respect to earnings. …