MALE MARITAL WAGE DIFFERENTIALS: TRAINING, PERSONAL CHARACTERISTICS, AND FIXED EFFECTS

I. INTRODUCTION There is substantial evidence that married white men earn between 8% and 15% more than unmarried white men in the United States, even after controlling for education and informal job market experience (e.g., potential or actual experience). Cross-section analysis indicates that both the level and the growth rate of wages increase during marriage. These results suggest that men may become more productive after marriage, an effect often attributed to the increased specialization possible following the formation of a multiperson household. However, panel estimates indicate that much of the differential is explained by individual-specific fixed effects, which suggest that more productive men are more likely to marry. While these results and implications are well known, the precise nature of the implied productivity differentials has received little attention in the literature. Using the 1979 cohort of the National Longitudinal Survey of Youth (NLSY79), we investigate the structure or source of the observed differential. We do so by first extending the analysis to a sample of African American men in the United States. To our knowledge, ours is the first study to conduct a detailed analysis of the marital wage gap among African American men that is fully comparable to that already available for white men. This extension is informative because African American households are known to exhibit less specialization along gender lines and because marital patterns are quite different by race. Next, we explore formal job training as one avenue to productivity enhancement. We outline a simple story suggesting that married men may be more receptive to training opportunities than unmarried men and present some evidence suggesting that firms may be more willing to offer training to married as compared to unmarried men. Previous analysis has focused on labor market experience or years married as proxies for both informal and formal job training. We significantly improve upon this by using direct information on formal job training to see if wage changes at or following the time of marriage are driven by training-induced productivity differentials. Third, we explore the nature of the selection effect or the possibility that it is more productive men who marry. The NLSY79 has an extensive array of information on personal characteristics that might be associated with both marriage and earnings. If certain personal characteristics are associated with both marriage and earnings, but not typically included in wage analyses, then the marital controls in standard wage equations may simply be proxying for these characteristics. Controlling for such characteristics directly should identify the nature of the selection effect and reduce the significance of the marital indicators in cross-section estimates. The attributes we examine include cognitive skills, parental background, and personality traits. Our final contribution is to estimate panel models to eliminate all observable and unobservable individual-specific, time-invariant factors and to reconcile these results with those obtained from cross-section models. Specifically, we exploit the different identification conditions between panel and cross-section models, examining the role of respondents who are always married, never married, or always separated/divorced. Technically, such individuals contribute to the identification of the cross section but not the panel estimates of the marital wage differential. Thus, these individuals may explain the substantial differences often observed between panel and cross-section estimates of the white male marital wage differential. II. LITERATURE REVIEW Evidence of the marital wage differential for white men in the United States is extensive (see Ribar 2004, for a review). Some of this differential has been attributed to a selection effect, to the fact that men who marry earn more throughout their lives than men who do not marry. …