Does Marriage Lead to Specialization in Sweden?: An Evaluation of Trends in Adult Earnings Before and After Marriage

Donna K. Ginther, University of Kansas
Marianne Sundström, Swedish Institute for Social Research
Anders Björklund, Swedish Institute for Social Research

Although a positive male marriage premium has been found in many studies, the source of the premium is unclear and debated – does it result from selection or specialization? Our paper analyzes trends in earnings for married and long-term cohabiting Swedish men and women who are parents children born in 1974-87. We use panel data on parents’ earnings from 1985 to 1995 to analyze trends in earnings before and after marriage. To identify the causal effect of marriage on earnings we use the marriage boom in Sweden in 1989, created by the reform of the widow’s pension system, and fixed-effects estimation. Our preliminary results suggest that all of the male marriage premium can be explained by positive selection whereas the female marriage penalty is explained by increased specialization in home production. We also examine the effect of marriage on total family earnings and find lower family earnings after marriage.

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Presented in Session 24: Union Formation