Brendon McConnell, University of Southampton Arnau Valladares-Esteban, University of St. Gallen
The Wage Premium of Married Women and Men
It is a well-known fact that married men earn higher wages than their single counterparts. In this paper, we document that, in the last decades, an analogous pattern has emerged for women. To measure the causal effect of marriage on wages presents three main challenges: a significant part of the female population does not participate in employment (sample-selection bias), there might be some variables that are relevant for both wages and marriage propensity that are not observable (omitted-variable bias), and wages might also affect marriage decisions (simultaneity bias). Using a variety of techniques, along with a novel instrument based on local social norms towards marriage, we show that marriage has a positive causal effect on wages, for both genders, although a significant part of the observed correlation is spurious. Finally, we present evidence that two of the main hypotheses discussed in the literature to explain the marriage wage premium for men, within-household specialization and employer discrimination, have little support in the data.