DESPERATION OR DESIRE? THE ROLE OF RISK AVERSION IN MARRIAGE

Because of the uncertainty inherent in searching for a spouse and the uncertainty of the future quality and state of the marriage itself, risk attitudes likely directly impact the timing of marriage. The effect of an individual’s risk aversion, measured via a series of hypothetical gambles over income on time to marriage, is examined using survival analysis. I find risk aversion significantly affects time to marriage, with more risk averse respondents marrying sooner than their more risk‐loving counterparts. Within‐family analyses using sibling data reveal a similar pattern. In addition, the effect of risk aversion on time to marriage is larger in magnitude and more statistically significant for men. One possible explanation for the different results between the sexes is that women value risk aversion as a desirable trait in potential mates. (JEL J10, J11, J12, J16)     

Marriage,Money, and African American Mothers’ Self‐Esteem

This study examined the effects of marital status and family income on the self‐esteem of 292 African American mothers. Counter to previous studies with European American mothers, family income moderated the effects of marital status. Those mothers with higher family income had higher self‐esteem, regardless of their marital status. For those with less family income, married mothers had much higher self‐esteem than unmarried mothers. Low‐income married mothers had the same levels of self‐esteem as high income mothers. It was concluded that financial resources can buffer the effects of being single, and being married can buffer the effects of being low income. Policy initiatives that focus on reducing the financial hardship on single mothers and increasing the marriage rate among lower income parents were also discussed.     

“Everything's There Except Money”: How Money Shapes Decisions to Marry Among Cohabitors

Cohabitation is now the modal path to marriage in the United States. Drawing on data from 115 in‐depth interviews with cohabitors from the working and lower middle classes, this paper explores how economics shape marital decision making. We find that cohabitors typically perceive financial issues as important for marriage, and we delineate several key themes. Whereas some social scientists speculate that cohabitors must think that marriage will change their lives in order to motivate marriage, our findings suggest that cohabitors believe marriage should occur once something has already changed—in this case, their financial status. Our results also imply that political and scientific discourse on financial problems as deterrents to marriage should be broadened beyond a focus on poor unmarried parents.     

Changes in Wives' Income: Effects on Marital Happiness,Psychological Well‐Being,and the Risk of Divorce

We investigate the effects of increases in married women's actual income and in their proportion of total family income on marital happiness, psychological well‐being, and the likelihood of divorce. We use data from a sample of 1,047 married individuals (not couples) in medium‐duration marriages, drawn from a five‐wave panel survey begun in 1980 and continuing to 1997. Structural equation modeling is used to assess the impact of increases in married women's absolute and relative income from 1980 to 1988 on the marital happiness and well‐being of married men and women in 1988. Event history analysis is used to determine how these changes affect the risk of divorce between 1988 and 1997. We find that increases in married women's absolute and relative income significantly increase their marital happiness and well‐being. Increases in married women's absolute income generally have nonsignificant effects for married men. However, married men's well‐being is significantly lower when married women's proportional contributions to the total family income are increased. The likelihood of divorce is not significantly affected by increases in married women's income. Nevertheless, increases in married women's income may indirectly lower the risk of divorce by increasing women's marital happiness.     

Changing patterns in the allocation of savings,investments and debts within couple relationships

Using data from the British Household Panel Study (BHPS) from 1995 to 2005 we examine the nature of the allocation of savings, investments and debts between heterosexual couple members, how these vary by individual and household characteristics, and how these patterns vary over a ten‐year time horizon. We find savings are more commonly held in joint names than investments or debts and there is evidence of an increasing independence in financial arrangements between couple members throughout the period 1995 to 2005. Controlling for age and other factors, cohabitation reduces the likelihood of shared financial arrangements. Both partners' labour market income affects the likelihood of having any savings or investments for both men and women but as men's labour income increases, the likelihood of men having jointly held savings and investments with their female partner reduces. Psychological well‐being is improved where individuals have any savings or investments either solely or jointly held with their partner.     

CAN'T BUY ME LOVE? A FIELD EXPERIMENT EXPLORING THE TRADE‐OFF BETWEEN INCOME AND CASTE‐STATUS IN AN INDIAN MATRIMONIAL MARKET

A large body of literature depicts that status‐based discrimination is pervasive, but is silent on how economic incentive interacts with such discrimination. This study addresses this question by designing a field experiment in a reputable arranged marriage market that is prone to strong caste‐status‐based discrimination. We place newspaper advertisements of potential grooms by systematically varying their caste and income and focus on responses of higher‐caste females to lower‐caste males. The substantive finding is that despite the evidence of discrimination, discriminatory behavior of higher‐status females decreases with an increase in the advertised monthly income of lower‐status males. (JEL C93, J12, J15)     

Changing Patterns of Religious Affiliation,Religiosity, and Marital Dissolution: A 35-Year Study of Three-Generation Families

This article examines multiple aspects of religion and the risk of marital dissolution with a life course lens. Relying on the Longitudinal Study of Generations (LSOG), 1971 to 2005, we explore the effects of religion on the risk of first marital dissolution. Using discrete time-logit analysis, we find that the effect of religion and religiosity on divorce and separation were not significant, after controlling for sociodemographic factors, such as gender, ethnicity, marriage cohort, education, presence of children, household income, and employment status. Our findings support exchange theory that emphasizes educational and financial resources as key factors in divorce rather than religion or religiosity.     

I've Got You Under My Skin: Marital Biography and Biological Risk

Social relationships shape adult health in profound ways. This study informs our understanding of this association by investigating how the transitions, timing, and exposures to marriage are associated with types of biological risk presumed to serve as pathways to disease and disability. Drawing on the 2005–2006 National Social Health and Aging Project (N = 1,062), the authors evaluated how marital biography was associated with cardiovascular, metabolic, and chronic inflammation risk. The results showed that the effects of marital biography were highly sensitive to gender, the dimension of marital biography, and type of biological risk. For example, marital exposure was protective of cardiovascular risk for women, but not men, whereas an earlier age at first marriage had a pernicious effect on chronic inflammation among men, but not women. Health behaviors did not explain these associations. The implications of these findings are discussed as they pertain to under‐the‐skin risk processes and chronic morbidity.     

A DIRECT TEST OF THE EFFICIENT MARRIAGE MARKET HYPOTHESIS

This paper takes Becker's efficient marriage market hypothesis at face value, and directly confronts it with data from Hong Kong. The theory of optimal assignment is used to develop an empirical model of spouse selection, which resembles a Tobit model. This model can address positive or negative assortative matching as well as marginal product pricing in marriage markets. We also use a computer algorithm to solve the assignment problem for imputed marital output. The degree to which the actual pairing of husbands and wives corresponds to the optimal pairing provides a goodness-of-fit test of the efficient marriage market hypothesis. ( JEL C51, C61, C78, J12)     

THE EFFECTS OF PERCEIVED AND ACTUAL FINANCIAL LITERACY ON FINANCIAL BEHAVIORS

A combined measure of financial literacy that includes both a test score of actual financial literacy and a self‐rating of overall financial literacy is used in this study. We find that the combined measure appears to provide greater understanding about how financial literacy affects financial behaviors. A large national survey of U.S. adults and households (n = 28,146) was used to investigate how this overall financial literacy is likely to change financial behaviors across five financial topics: credit cards, investments, loans, insurance, and financial advice. For each topic, we include 4–5 financial behaviors (22 in total) to demonstrate the consistency of the findings within and across topics. Although we are unable to identify a causal relationship, the results from the probit analysis show that both actual and perceived financial literacy appear to influence financial behaviors and that perceived financial literacy may be as important as actual financial literacy. (JEL D14, G00)     

ACCOUNTING FOR URBAN CHINA'S RISING INCOME INEQUALITY: THE ROLES OF LABOR MARKET,HUMAN CAPITAL,AND MARRIAGE MARKET FACTORS

This paper analyzes China's rising family income inequality since the early 1990s when the urban labor market started its transformation from a centrally controlled to a market‐driven one. We document the trends in income inequality over the period of 1992–2009 using the Urban Household Survey data, and adopt the approach recently proposed by Eika et al. (2014) to decompose changes in income inequality. We find that labor market factors accounted for about three‐quarters of the overall increases in income inequality while falling marriage rate contributed the other quarter. Changes in human capital levels and marital assortativeness have not contributed to the rising inequality. (JEL D31, I26, J12)     

INCOME INEQUALITY: THE CONSEQUENCES OF SKILL‐UPGRADING WHEN FIRMS HAVE HIERARCHICAL ORGANIZATIONAL STRUCTURES

During the last three decades, most developed countries have experienced increasing income inequality. Using Danish register data from 1992 to 2007 for all private‐sector employees, we confirm that income inequality has increased in Denmark. We also observe an increase in the relative employment of highly educated individuals, as well as differential income growth rates across employee subgroups where, in particular, managers experienced significant real income progression. We use an equilibrium search framework with on‐the‐job search to study the interplay between skill‐upgrading, management compensation, and income inequality. In this model we can determine the management and education premia. We can also show that when our model is exposed to skill‐upgrading, it is capable of producing income dynamics similar to those observed in the Danish income distribution. (JEL J3, J6, M5)     

Adolescent Sexuality and the Risk of Marital Dissolution

This research investigates whether first sexual intercourse during adolescence is associated with increased risk of first marriage dissolution and tests whether the results are consistent with causal or selection explanations. Drawing on a sample of 3,793 ever‐married women from the 2002 National Survey of Family Growth, this study estimated event‐history models of first‐marriage dissolution. Results indicate that wanted sexual debut in later adolescence does not directly increase the risk of marital dissolution but is linked indirectly as a result of subsequent premarital sexual outcomes. Sexual debut that is not completely wanted or that occurs before age 16 is associated with increased risk of marital dissolution. The results suggest that the timing and context of adolescent sexual debut have important implications for marital stability.     

THE ROLE OF NONCOGNITIVE SKILLS IN EXPLAINING COGNITIVE TEST SCORES

This article examines whether noncognitive skills—measured both by personality traits and by economic preference parameters—influence cognitive tests' performance. The basic idea is that noncognitive skills might affect the effort people put into a test to obtain good results. We experimentally varied the rewards for questions in a cognitive test to measure to what extent people are sensitive to financial incentives. To distinguish increased mental effort from extra time investments, we also varied the questions' time constraints. Subjects with favorable personality traits such as high performance motivation and an internal locus of control perform relatively well in the absence of rewards, consistent with a model in which trying as hard as you can is the best strategy. In contrast, favorable economic preference parameters (low discount rate, low risk aversion) are associated with increases in time investments when incentives are introduced, consistent with a rational economic model in which people only invest when there are monetary returns. The main conclusion is that individual behavior at cognitive tests depends on noncognitive skills. ( JEL J20, J24)     

THE POLITICAL ECONOMY OF INTERGENERATIONAL INCOME MOBILITY

The intergenerational elasticity of income is considered one of the best measures of the degree to which a society gives equal opportunity to its members. While much research has been devoted to measuring this reduced‐form parameter, less is known about its underlying structural determinants. Using a model with exogenous talent endowments, endogenous parental investment in children, and endogenous redistributive institutions, we identify the structural parameters that govern the intergenerational elasticity of income. The model clarifies how the interaction between private and collective decisions determines the equilibrium level of social mobility. Two societies with similar economic and biological fundamentals may have vastly different degrees of intergenerational mobility depending on their political institutions. We offer empirical evidence in line with the predictions of the model. We conclude that international comparisons of intergenerational elasticity of income are not particularly informative about fairness without taking into account differences in politico‐economic institutions. (JEL E24, J62, J68, P16)     

Beyond Employment and Income: The Association Between Young Adults’ Finances and Marital Timing

This study tested an extension of the theory of marital timing (Oppenheimer, Am J Sociol 94:563–591, 1988) by assessing whether visible and less visible financial assets and debt mediated the relationship between employment and the likelihood of marriage. We conducted these prospective, longitudinal analyses using a sample of 1,522 never-married young adults from the National Survey of Families and Households. For participants who were not cohabiting at Wave 1, financial issues such as car values predicted marriage but did not mediate the relationship between work hours, occupational prestige, and the likelihood of marriage. For cohabiting participants, employment factors were the strongest predictor of marriage.     

INTERMARRIAGE AND THE LABOR MARKET OUTCOMES OF ASIAN WOMEN

The impact of intermarriage with natives, on labor market outcomes of immigrants, is not homogeneous across ethnic groups. Wages of Asian women are compared with non‐Asians. Both ordinary least squares and instrumental variables estimates of the effects of intermarriage on the wages of Asian women are negative and significant. Non‐Asian women earn a wage premium that becomes insignificant when controls for selection into marriage are introduced. One possible explanation for the intermarriage penalty for Asians is an income effect of having a high‐earning native husband. Intermarriage penalties rise with husband's education. Assimilation patterns of intermarried Asians indicate that they have lower initial wages, market hours, and employment, but exhibit faster rates of growth over their years of stay. The results are robust across Asian subgroups and husband's ethnicity. (JEL J16, J12, J31, J61)     

THE ROLE OF FINANCIAL LITERACY IN DETERMINING RETIREMENT PLANS

Workers nearing retirement face many important, and often irreversible, choices. We collected detailed demographic and financial literacy data on over 1,500 workers nearing retirement at three large companies to assess how individuals are planning for retirement. Many respondents display limited knowledge and understanding of public and company‐provided retirement benefits. Controlling for basic demographics and wealth, we find that misconceptions about eligibility ages and plan generosity influence workers' expected age of retirement. Although retirement‐related decisions will affect workers' well‐being for the remainder of their lifetimes, many do not possess enough basic financial knowledge to confidently make optimal choices. (JEL J26, J320, J240)     

Job turnover, wage rates, and marital stability: How are they related?

This study examines the interplay between job stability, wage rates, and marital stability. We use a Dynamic Selection Control model in which young men make sequential choices about work and family and estimate the model using an approach that takes account of self-selection, simultaneity and unobserved heterogeneity. The results quantify how job stability affects wage rates, how both affect marital status, and how marital status affects earnings and job stability. The study reveals robust evidence that job changes lower wages and the likelihood of getting married and remaining married. At the same time, marriage raises wage rates and job stability. To project the sequential effects linking job change, marital status, and earnings, we simulate the impacts of shocks that raise preferences for marriage and that increase education. Feedback effects cause the simulated wage gains from marriage to cumulate over time, indicating that long-run marriage wage premiums exceed conventional short-run estimates.