Premarital cohabitation and subsequent marital

Married couples who began their relationship by cohabiting appear to face an increased risk of marital dissolution, which may be due to self-selection of more dissolution-prone individuals into cohabitation before marriage. This paper uses newly developed econometric methods to explicitly address the endogeneity of cohabitation before marriage in the hazard of marital disruption by allowing the unobserved heterogeneity components to be correlated across the decisions to cohabit and to end a marriage. These methods are applied to data from the National Longitudinal Study of the High School Class of 1972. We find significant heterogeneity in both cohabitation and marriage disruption, and discover evidence of self-selection into cohabitation.