Marriage and career: the dynamic decisions of young men

Eric D. Gould, Hebrew University, Jerusalem, Israel (NOTE: 16.00 hrs., Room 0.089 TS53, in association with METEOR)

This paper estimates the returns to career decisions in the marriage market
and the returns to marital choices in the labor market. The basic idea is
that investments in the labor market can affect the chances of receiving a
marriage offer, the type of offer, and the probability of getting divorced.
Also, marital status can affect one's outcomes in the labor market, most
notably the "marriage premium.'' To untangle this simultaneous
decision-making process, I develop a dynamic programming model of the joint
career and marital decisions of young men between the ages of 16 and 39. The
results show that labor market decisions are heavily influenced by their
impact in the marriage market. If there were no returns to career choices in
the marriage market, men would tend to work much less, study less, and
choose blue-collar jobs over white-collar jobs. These results suggest that
the current literature strongly underestimates the true returns to human
capital investments by ignoring their returns in the marriage market. In
addition, the results show that OLS estimates of the marriage premium are
biased upwards.

Date: 26 June-00 0000