Riley Wilson and Dr. Joseph Price, Economics

Research has consistently found that marriage is associated with a number of positive economic, social and health outcomes (Korenman and Neumark, 1991; Loh, 1996). However, despite the many observed benefits of marriage at a point in time, there is a general belief that economic outcomes will be even higher if young adults wait until they are older to get married. This has led to a dramatic increase over the last decade in the average age of first marriage. Census data shows that the median age of first marriage in the United States United States from 1971 to 2011 increased dramatically from 23.1 to 28.7 years for men and from 20.9 to 26.5 for women.

We use data from the American Community Survey (ACS) and the National Longitudinal Survey of Youth 1979 (NLSY79) to uncover two relationships. First, the relationship between marital status and income at a point in time, and second, the relationship between age at first marriage and income later on in life. Our first analysis looks at personal income using NLSY79. The NLSY79 follows a cohort of youth and reports both personal and household income at regular intervals as well as extensive background characteristics on parental education, work, and marital status as well as family of origin characteristics. These variables allow us to attempt to control for as much observable variation as possible in order to more accurately identify the first relationship. Specifically, we use regression analysis to look at the income differences between married and unmarried men or women at a given age between 18 and 30. As found in previous research, we find that there is a raw premium for marriage for men on the order of $2,000-$3,000 and significant at all ages greater than twenty, suggesting that men financially benefit from marriage if they marry after the age of twenty. On the other hand women experience a raw negative premium of nearly $2,000 when no other controls are included (see Figure 1). This suggests as observed by others that marriage has a negative financial impact on women. This is likely due to the fact that women often forgo future education and employment to work with the family or participate in other activities— such as child birth—which affect personal income.

A vast body of literature points to the issue of selection bias in the marriage decision. In an attempt to control for selection we include measures of each individual’s age at first birth, education, and other family of origin characteristics in order to get a more accurate estimate. We find that for men the magnitude of the marriage premium remains almost the same, which suggests that there might be a marriage premium at nearly every age between 18-30 for men even after controlling for selection. Interestingly, for women we find that the negative marriage premium for women disappears as soon as we control for other factors. This suggests that the original correlation observed is actually due to other characteristics and the negative benefit of marriage –widely cited in the media – is actually due to other factors such as when the woman becomes a mother or how much education she pursues.

In the above analysis we see the effect of marriage at the year of marriage and using the ACS we now check to see if there is a lasting effect for marrying young. The ACS dataset is large and provides a national representative sample which we use to examine the second relationship. We limit our sample to 33-35 year olds and see if there is an effect for marrying at a given age (see Figure 2). We see that the personal income premium for men steadily grows after age 20 and the maximum occurs between 26-27 and then begins to fall again. The marriage premium for women follows a different trend, and even suggests that women who don’t marry might earn more than women who marry before the age of 27. Once again, by controlling for age at first birth and education, the magnitude of the effects change significantly. The maximum marriage premium for men occurs earlier, at about 24 and the previously observed negative premium for women appears to be non-existent, suggesting that marriage does not have a negative impact for women.

Our findings uncover an interesting paradox that motivates the need for further research. In the United States, people have started to wait until they are older to marry. This trend is partially due to the expected higher income if a person waits. Despite this trend we also observe that the number of children born to unmarried parents is also steadily rising (see figure 3). In 2010, 40.8 % of children in the U.S. were born out of wedlock (CDC, 2012). If future financial outcomes are motivating factors in the marriage decision, our research shows that childbirth, not marriage should be delayed. In our sample most women had their first child within a few years of marriage. The correlation of these two events has led many to falsely believe that marriage leads to lower levels of personal income. Our research highlights an important relation and suggests that women who want higher personal incomes should either consider continuing education or delaying childbirth and not necessarily delaying marriage.

References

• Loh, E. (1996). “Productivity differences and the marriage wage premium for white males.” The Journal of Human Resources. 31(3) 566-589.
• Korenman, S. and Neumark, D. (1991). “Does marriage really make men more productive?” The Journal of Human Resources. 26(2) 282-307. CDC, (2012). “Births: Final Data for 2010.” National Vital Statistics Reports. 61(1) 1-71.