1. Chapter 4 Marriage & the Family Economic Issues and Applications Race & family structure the marriage premium divorce Race & family structure the marriage premium divorce

5. Race and family structure % married has fallen for all women  especially Black women especially 1970s driven by “never married” more than divorce % married has fallen for all women  especially Black women especially 1970s driven by “never married” more than divorce

6. % children in 2-parent families  drop is steeper for Black children  sharp drop in 1970s % children in 2-parent families  drop is steeper for Black children  sharp drop in 1970s

7. Why? rational choice gains to marriage have fallen and/or quality of single life is better must be true  especially for Black men and women  especially in 1970s gains to marriage have fallen and/or quality of single life is better must be true  especially for Black men and women  especially in 1970s

8. 3 possible explanations marriage market women’s wages welfare system marriage market women’s wages welfare system

9. marriage market less-skilled men have fared worse in labor markets since 1970s  lower real wages  higher unemployment  affects Black men more lower levels of education less-skilled men have fared worse in labor markets since 1970s  lower real wages  higher unemployment  affects Black men more lower levels of education

10. result:  women less willing to marry men w/out job prospects is it true?  explains some but not all of marriage decline result:  women less willing to marry men w/out job prospects is it true?  explains some but not all of marriage decline

11. incarcerationincarceration 20% of Black men between 35-39 have been in prison  (3% white men)  more than have been to college 20% of Black men between 35-39 have been in prison  (3% white men)  more than have been to college

12. women’s wages as women and men are more alike,  gains to specialization fall gender earnings gap  smaller for Black women less gains to specialization as women and men are more alike,  gains to specialization fall gender earnings gap  smaller for Black women less gains to specialization

13. wages for all women have risen,  increasing gains to being single,  decreasing supply of women to marriage decreasing marriage  wage increase for Black women has been larger wages for all women have risen,  increasing gains to being single,  decreasing supply of women to marriage decreasing marriage  wage increase for Black women has been larger

14. The welfare system AFDC  cash welfare benefits  (replaced by TANF in 1996)  mostly for low-income single- mother families AFDC payments are very low  an attractive option only to those w/ limited job skills AFDC  cash welfare benefits  (replaced by TANF in 1996)  mostly for low-income single- mother families AFDC payments are very low  an attractive option only to those w/ limited job skills

15. for low-skilled women  welfare may be more attractive than marriage OR work incentive for out-of-wedlock children incentive for divorce  Black women have lower education levels for low-skilled women  welfare may be more attractive than marriage OR work incentive for out-of-wedlock children incentive for divorce  Black women have lower education levels impact of welfare

16. evidenceevidence not a lot family trends increased in 1970s,  but real value of welfare benefits fell at same time  % Black children on welfare has been stable not a lot family trends increased in 1970s,  but real value of welfare benefits fell at same time  % Black children on welfare has been stable

17. Male Earnings & Marriage we observe that married men earn more than unmarried men  10-25% more when controlling for other differences (like age, education…)  “male marriage premium” we observe that married men earn more than unmarried men  10-25% more when controlling for other differences (like age, education…)  “male marriage premium”

19. Why the premium? employer discrimination  view married men more favorably  unlikely under competition employer discrimination  view married men more favorably  unlikely under competition

20. division of labor  marriage productivity effect  married men have wife to specialize in nonmarket work (better focus on market work) division of labor  marriage productivity effect  married men have wife to specialize in nonmarket work (better focus on market work)

21. selection bias  marriage selectivity effect  men who are married differ from those who are not responsible, motivated, etc.  qualities that lead to marriage also lead to job success selection bias  marriage selectivity effect  men who are married differ from those who are not responsible, motivated, etc.  qualities that lead to marriage also lead to job success

22. marriage premium has fallen since 1970  less division of labor in HH  decline in marriage overall marriage/unmarried not as different marriage premium has fallen since 1970  less division of labor in HH  decline in marriage overall marriage/unmarried not as different

23. evidence about 2 effects both seem to be important  controlling for selection bias makes premium smaller both seem to be important  controlling for selection bias makes premium smaller

24. evidence supports productivity effect  premium larger for men with wives that do not work  premium rises with length of marriage evidence supports productivity effect  premium larger for men with wives that do not work  premium rises with length of marriage

25. DivorceDivorce no-fault divorce  since 1970  requires no finding of fault  46 states unilateral divorce  does not require explicit consent of both parties no-fault divorce  since 1970  requires no finding of fault  46 states unilateral divorce  does not require explicit consent of both parties

28. with 1% annual divorce rate  25% of marriages end w/in 30 years with 2% annual divorce rate  45% of marriages end w/in 30 years with 1% annual divorce rate  25% of marriages end w/in 30 years with 2% annual divorce rate  45% of marriages end w/in 30 years

29. Why?Why? gains to marriage fall  to point where better off single when will this happen?  total benefits of marriage < total benefits of two as singles gains to marriage fall  to point where better off single when will this happen?  total benefits of marriage < total benefits of two as singles

30. for divorce to occur, gain to marriage were once positive, but turn negative  happening more often than in the past gain to marriage were once positive, but turn negative  happening more often than in the past

31. specializationspecialization gain decline as men and women are more alike in productivity  marriage more vulnerable gain decline as men and women are more alike in productivity  marriage more vulnerable

32. rising wages for women singlehood more attractive for women  increase % never married  increase divorce singlehood more attractive for women  increase % never married  increase divorce

33. probability of divorce spouses reluctant to specialize  could be penalized if divorce occurs  married women stay in labor force spouses reluctant to specialize  could be penalized if divorce occurs  married women stay in labor force

34. Economic consequence of divorce women’s economic status falls by 20-25% men’s economic status rises by 10% no-fault, unilateral divorce  led to lower divorce settlements for women property, alimony women’s economic status falls by 20-25% men’s economic status rises by 10% no-fault, unilateral divorce  led to lower divorce settlements for women property, alimony