The role of income in marriage and divorce transitions among young Americans

The paper investigates the importance of income in young Americans decisions to form and dissolve households. Using data on young American men and women from the NLSY, an important role for income in both these transitions is found. There are significant differences between young men and women. High earnings capacity increases the probability of marriage and decreases the probability of divorce for young men. High earnings capacity decreases the probability of marriage for young women, and has no impact on divorce.Thanks are due to seminar audiences at Bristol and the Royal Economic Society, two anonymous referees and the Editor for useful comments, and to Matt Dickson for preparation of the tables. Any errors are those of the authors. Responsible editor: John F. Ermisch.