Interesting write-up in The Economist. (No, I don’t read it, someone directed me to the article.)
And the policy implications of the impact of assortive mating on income inequality?
- ban women from becoming educated?
- enforce random marriages?
Actually, no policy implications (apart from setting the record straight on why observed income equality has changed in the way it has).
And, by the way, do we really care about the Gini coefficient in developed economies where those at the bottom receive government transfers and in-kind benefits?
IN “MAD MEN”, a series about the advertising industry in the 1960s, women are underpaid, sexually harassed and left with the kids while their husbands drunkenly philander. Sexual equality was a distant dream in those days. But when Don Draper, the show’s star, dumps the brainy consultant he has been dating and marries his secretary, he strikes a blow for equality of household income.
Nowadays, successful men are more likely to marry successful women. This is a good thing. It reflects the fact that there are more high-flying women. Male doctors in the 1960s married nurses because there were few female doctors. Now there are plenty. Yet assortative mating (the tendency of similar people to marry each other) aggravates inequality between households—two married lawyers are much richer than a single mother who stacks shelves. A new study* of hundreds of thousands of couples investigates the link.
But in reality the highly educated increasingly married each other. In 1960 25% of men with university degrees married women with degrees; in 2005, 48% did. As a result, the Gini rose from 0.34 in 1960 to 0.43 in 2005.
Assortative mating is hardly mysterious. People with similar education tend to work in similar places and often find each other attractive. On top of this, the economic incentive to marry your peers has increased. A woman with a graduate degree whose husband dropped out of high school in 1960 could still enjoy household income 40% above the national average; by 2005, such a couple would earn 8% below it. In 1960 a household composed of two people with graduate degrees earned 76% above the average; by 2005, they earned 119% more. Women have far more choices than before, and that is one reason why inequality will be hard to reverse.
*Marry Your Like: Assortative Mating And Income Inequality, by Jeremy Greenwood, Nezih Guner, Georgi Kocharkov and Cezar Santos, NBER Working Paper 19829