Scandinavian Working Papers in Economics

HUI Working Papers,
HUI Research

No 34: The Effects of Assortative Mating on Earnings: Human Capital Spillover or Specialization?

Johanna Åström
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Johanna Åström: The Swedish Retail Institute (HUI), Postal: Regeringsgatan 60, 103 29 Stockholm, Sweden, and Department of Economics, Umeå University, 901 87 Umeå, Sweden

Abstract: This paper studies how the spouse’s productivity in the labor market affects one’s individual earnings when married. Theoretically, the high productivity of a spouse in a marriage could affect the other spouse’s earnings in two ways: negatively through specialization and division of labor, or positively from human capital spillover. Using longitudinal microdata on individuals as both single and married people allows us to estimate the spouses’ productivity as a single persons and thereby avoid problems of endogeneity between the two spouses’ labor market performances. Productivity is approximated with residuals from estimates of pre-marriage earnings equations. Results indicate that there are negative effects of the spouse’s productivity on individual earnings for both males and females, and that this effect appears to be enhanced by the duration of the marriage. However, closer examination shows that only the youngest groups of males and females experience this negative effect. In addition, there is some evidence for a positive effect of the husband’s productivity on earnings in the case of older groups of females.

Keywords: Marriage; Assortative mating; Earnings; Specialization

JEL-codes: D10; J12

36 pages, October 1, 2009

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