Building the Family Nest: Premarital Investments, Marriage Markets, and Spousal Allocations

We develop a transferable utility model of the household in which the marriage market is characterized by (negative or positive) assortative matching, and spousal allocations are determined by premarital investments. We demonstrate that all sharing rules along the assortative order support efficient outcomes both in terms of premarital investments and intra-household allocations. The efficiency of premarital choices and household allocations then enables us to show that, for each couple, the marriage market generates a unique and maritally sustainable sharing rule that is a function of the distribution of premarital endowments and the sex ratios in the market. According to our results, transfers among spouses occur on two margins: premarital investments and intra-marital spousal allocations. Asymmetries in the sex ratios in the marriage markets produce gender differences in premarital investments and consumption that are larger for individuals with small premarital endowments than those with larger endowments. A corollary of these findings is that, when men are in short supply in the marriage markets, women can invest more than men even when the returns to investment are lower or the costs are higher for women.     

A DYNAMIC DECISION MODEL OF MARRIAGE,CHILDBEARING, AND LABOUR FORCE PARTICIPATION OF WOMEN IN JAPAN*

This paper empirically examines marriage, child bearing and labour force participation behaviour of fertile‐aged women in Japan, applying an estimable dynamic model of dis‐crete choice. Using microdata from the 1994–1999 Japanese Panel Survey of Consumers, the structural estimation result suggests that, overall, women are worse off with marriage and part‐time work without financial benefits. Women are better off having two or more children, but considerably worse off because of the burden of raising infants. In addition, probabilities of finding full‐time work after career interruption are estimated at about 18% for university educated women and 12–13% for less educated women.     

中国未来婚姻挤压研究

中国的男孩偏好和对女孩的歧视导致了男性婚姻挤压。在潜在初婚比模型的基础上,使用标准化初婚频率和去进度效应方法设计了两种新的模型,并与现有模型结合,研究中国婚姻挤压状况。在潜在初婚比基础上开发的模型所得到的结论基本相同。2016年到2046年的30年时间里,婚姻市场上男性和女性的潜在初婚比都在1.15以上;2060年之后保持在1.05-1.08水平。从2000年开始,中国会面临严重的男性婚姻挤压,2016年至2046年平均每年过剩男性在120-150万之间,2060年之后每年在50万之下。如果出生性别比得不到有效控制,则未来男性婚姻挤压情况将严重得多。     

Housing price and entrepreneurship in China

Housing price has increased dramatically in China during the past decade. The appreciation of house value could relax credit constraint and thus encourage entrepreneurship. However, a house serves as both an important investment channel and a prerequisite for marriage in China. The continuous high return of investment in housing and intensified marriage market competition make house purchase a priority for young people and their parents, which would crowd out entrepreneurial activities. Using two large datasets, we find that high housing price in general discourages entrepreneurial activities for urban adults. For house owners, while house value appreciation has a positive wealth effect, the ratio of mortgage over income has a negative effect. For non-owners, a higher ratio of housing price over income corresponds to a lower probability of entrepreneurship. This study highlights the negative consequences of surging housing price on entrepreneurship in developing countries.     

LABOUR‐MARKET ATTACHMENT AND TRAINING PARTICIPATION*

This paper examines how expected attachment to the labour market and expected tenure at a specific firm affect training participation. The results, based on cross‐sectional data from Japan, indicate that expected attachment to the labour market affects participation in both employer‐ and worker‐initiated training, while expected tenure at a specific firm mainly explains participation in employer‐initiated training. These two attachment indices explain more than two‐thirds of the sex gap in training participation. Employers in less‐competitive labour markets are more likely to offer employer‐initiated training to their workers.     

The risk and cost of job loss in Canada, 1978–2008

We assess the risk and cost of worker displacement in Canada over the last three decades. We show that neither the risk of job loss nor the short‐term earnings losses of displaced workers trended upwards during that period. However, short‐term earnings losses of workers displaced from manufacturing increased in recent years, as a smaller proportion found a post‐displacement job in that sector. In line with Stevens ( 1997 ) and Couch and Placzek ( 2010 ), we find that high‐seniority workers and individuals with stable labour market attachment experienced, five years after displacement, earnings losses that ranged between 10% and 18%.     

Why the marriage squeeze cannot cause dowry inflation

An influential explanation for rising dowry payments is the “marriage squeeze”. The present paper shows this explanation to be internally inconsistent. The marriage squeeze argument for inflation relies on the fact that population growth leads to an excess supply of brides in the marriage market. This excess supply is resolved by some women postponing marriage, so that the average age of brides increases. In previous studies the argument is stated informally. Here, a matching model of marriage is developed to formally analyze the link between dowry payments and population growth. It is shown that a marriage squeeze cannot yield dowry inflation. In fact, when women who do not find matches at the ‘desirable’ marrying age re-enter the marriage market as older brides, a marriage squeeze is shown to imply dowry deflation. Population change is therefore not a promising explanation for the observed increases in dowry payments.     

Surplus men and scarce women: The impact of mating competition on the desire for sons in China*

We conducted this research to explore the possible factors shaping son preference, with a view to understanding the persistently high male/female sex ratio. Using data from the Chinese General Social Survey (CGSS) and the Population Census of China, we find a significant impact of regional sex ratio on people's preferences for the sex of their future children. Specifically, the extent of son preference decreases with the increase in the male/female sex imbalance in the local area. We also find that sex imbalance has a positive impact on a wide range of outcomes that capture the pressure on males to enter marriage markets, such as regional housing prices, the number of houses owned, and family economic status. This result is consistent with the view that greater sex imbalance exerts larger pressure on men in the marriage market, leading to changes in son preference. Omitted variable bias is addressed by using climate changes in the month preceding the fertilization period as an instrument for sex ratio. Instrumental sex ratio negatively impacts son preference, offering strong support for our hypothesis.     

How does the marriage market clear? An empirical framework

Abstract. The paper surveys the Choo and Siow (2006a; CS) marriage matching model and its extensions. CS derives a behavioural marriage‐matching function. The collective model of intra‐household allocations can be integrated into this framework. Spousal labour supplies respond to changing marriage market conditions. Marriage market tightness, the ratio of unmarried type i men to unmarried type j women is a sufficient statistic for marriage market conditions for those types of individuals. The hypothesis that spousal labour supplies vary to equilibrate the marriage market has overidentifying restrictions. The framework extends to a dynamic marriage‐matching environment. Empirically, this paper shows how the famine caused by the great leap forward in Sichuan affected the marital behaviour of famine‐born cohorts. Marriage market tightness is shown to be a useful statistic for summarizing marriage market conditions in the United States. Marriage market conditions in the contemporary United States primarily affect spousal labour force participation rather than hours of work.     

HOW DO HIGH SCHOOL GRADUATES IN JAPAN COMPETE FOR REGULAR,FULL‐TIME JOBS? AN EMPIRICAL ANALYSIS BASED UPON AN INTERNET SURVEY OF THE YOUTH*

We use a survey of Japanese youth within 10 years after high school graduation to investigate impacts of academic and social skills on their success in the job market. We find three major factors account for the job market outcome immediately after school: school characteristics and job‐placement services, academic performance, and social skills, including negative impacts of problematic behaviors at school. Second, when we run a probit regression on whether or not the surveyed individuals hold regular, full‐time jobs, we find the persistent but declining (over age) impact of the job placement immediately after school. Moreover, we find that the impact of variables pertaining to social skills remain significant even after controlling for the job‐placement outcome after school, whereas other variables, such as grade point average or attributes of high schools, are largely irrelevant to the current employment status.     

Conservative Politicians and Voting on Same‐sex Marriage

We examine whether conservative politicians are less likely to support same‐sex marriage when they run for office in safe rather than in contested districts using new data based on a roll‐call vote in the national German parliament. The results show that the margin of the majority for the incumbent in the previous election was a strong predictor for supporting same‐sex marriage. When the majority increased by a 1 percentage point, the likelihood of voting in favour of same‐sex marriage decreased by around 1.3 percentage points. We conjecture that politicians are election‐motivated – even when submitting roll‐call votes on a matter of conscience.     

The Competitive Saving Motive: Concept,Evidence, and Implications

This short essay surveys recent literature on the competitive saving motive and its broader economic implications. The competitive saving motive is defined as saving to improve one’s status relative to other competitors for dating and marriage partners. Here are some of the key results of the recent literature: (i) cross-country evidence show that greater gender imbalances tend to correspond with higher savings rates; (ii) household-level evidence suggest that: (a) families with unmarried sons in rural regions with more skewed sex ratios tend to have higher savings rates, while savings rates of families with unmarried daughters appear uncorrelated with gender imbalances; and (b) savings rates of families in cities tend to rise with the local sex ratio; (iii) rising sex ratios contribute nearly half of the rise in housing prices in the People’s Republic of China; and (iv) families with sons in regions of greater sex ratios are more likely to become entrepreneurs and take risky jobs to earn more income.     

Determinants of age at marriage in Karnataka during 1971-1981: a district level analysis

"In this paper we examined the interdistrict variations in mean age at marriage of males and females in Karnataka [India] in two points of time, 1971 and 1981, and also the possible factors influencing this variation....A multivariate analysis of the determinants of mean age at marriage in Karnataka showed that literacy rate, sex ratio of the population and percentage of villages electrified are important in explaining the regional and time variation in age at marriage of both sexes.... Our regression results indicated that a 10 per cent increase in female literacy rate is associated with approximately one-year increase in female age at marriage. However, neither the increase in female literacy nor the changes in the sex ratio of the population could explain all the increase in female age at marriage during 1971-81. This indirectly suggests that there was an increase in female age at marriage among all socio-economic groups."     

Migration,Unemployment, and Skill Downgrading

In this paper, we analyze the labor market impacts of immigration under flexible and rigid labor market regimes. A general equilibrium framework is developed, accounting for skill heterogeneity and labor market frictions, where unemployed medium‐skilled manufacturing workers are downgraded into low‐skilled service jobs, while low‐skilled service workers might end up unemployed. The analytical analysis shows that medium‐skill immigration decreases low‐skilled unemployment under the flexible regime, indicating a complementarity effect, while the rigid regime induces a substitution effect, leading to low‐skilled unemployment. Moreover, it leads to wage polarization. In a numerical analysis, the economic effects of different migration scenarios are quantified.     

Marriage,Divorce, and Interstate Risk Sharing*

In this paper, we study the importance of marriage for interstate risk sharing in the US. We find that US federal states in which married couples account for a higher share of the population are less exposed to state‐specific output shocks. Thus, in addition to improving the allocation of risk at the individual level, marriage also has implications for risk sharing at the more aggregated state level. Quantitatively, the impact of marriage on interstate risk sharing varies over divorce regimes.     

Occupational Attainment and Immigrant Economic Progress in Australia*

Using data from the 2001 Australian Census of Population and Housing, on adult men in full‐time employment, this paper augments a conventional human capital earnings function with information on occupations. It also estimates models of occupational attainment. The results from both the earnings function and model of occupational attainment indicate that the limited international transferability of human capital skills results in immigrants entering into relatively low status occupations when they first enter the Australian labour market. Comparison with similar research for the USA suggests that the different immigrant selection regimes (primarily family reunion in the USA, skill‐based immigration in Australia) do not impact on the negative association between current occupational status and pre‐immigration labour market experience.     

Economic transition,gender bias,and the distribution of earnings in China*

Market‐oriented economic reform, which accelerated after 1992, has brought substantial changes to the Chinese economy. This dramatic economic transition was raised two important questions: ‘How are women faring in the transition from a planned economy to a market economy?’ and ‘Are some women faring relatively better than other women’? We use data from the Chinese Household Income Projects for the years 1988 and 1995, a standard earnings equation, and quantile regressions to estimate and decompose the earnings gap. Our findings suggest that while the earnings gap has increased, the fraction of the gap ‘unexplained’ by differences in human capital variables such as education and experience has declined over time. This result is particularly pronounced for low earning women.     

HUMAN CAPITAL AND THE PROBABILITY OF DIVORCE

Concern about the high poverty rates experienced by children in female‐headed households has led to policies aimed at increasing these households' income. In this paper we present a model that analyses decisions made before and during marriage to invest in the human capital of parents and children. These decisions result from a variety of anticipated post‐divorce monetary transfers between spouses.     

Globalization,welfare, and the attitudes toward higher education

In this paper we study how the attitudes toward higher education may affect labor market outcomes in the context of globalization. In particular, we show that different educational attitudes are responsible for differences in the wage differential among countries. Using a matching model with two types of workers and firms, we find that there is a trade-off between the wage differential and the workers’ welfare, namely, that an economy that is less willing to educate itself will display a lower wage differential but will lose in terms of welfare. Moreover, from a policy perspective, we show that the negative effects on welfare due to this disinclination to study can be offset by increased labor market flexibility. All things considered, policy makers ought to keep in mind that both a positive attitude toward higher education and labor market flexibility, can lead to improved overall performance in this increasingly globalized world.     

Influence Of Over‐ And Underconfidence On A Marriage Market*

This paper examines misconfidence (over‐ or underconfidence) and marriage proposal strategies in a two‐sided search model with non‐transferable utility. Single agents are vertically heterogeneous—there exists a ranking of marital charm (types). It is shown that there are two externalities to over‐ or underconfident behaviour: someone's over‐ or underconfidence affects: (i) the duration of search for others who directly meet over‐ or underconfident agents; and (ii) the marriage decision of others who directly or indirectly meet over‐ or underconfident agents. Furthermore, these externalities prevent the lowest‐type agents from marrying in an equilibrium.