Family Status and Wages of Men: New Evidence from the U.S., the U.K., Germany, and Switzerland

• In Event: 4255 - Section on Economic Sociology Roundtables (1 hour)
  In Refereed Roundtable 60min: 12. Status Characteristics and Wages

Abstract

For decades, there has been a consensus that marriage benefits men’s hourly wages. The main explanation has been gender role specialization within the household. Recent evidence, however, challenged this view suggesting that there is no causal marital wage premium (MWP) for men in the United States (Ludwig and Brüderl 2018, Killewald and Lundberg 2017). These authors showed that such a premium is spurious and most likely due to selection processes in the marriage market. In this paper we argue that this critique of the MWP applies to the literature on family related wage gaps (“family premiums”) more generally. To this end, we broaden the study by Ludwig and Brüderl (2018) in two ways:
First, we extend their analysis to European countries. We use long-lasting panel studies from the U.S., the U.K, Switzerland, West Germany, and East Germany. With pooled OLS (POLS) we find a large and significant MWP in all five countries. With conventional fixed-effects estimation (FE) the MWP is reduced in all countries. Finally, using an extended fixed-effects model that allows for individual-specific constants and slopes (FEIS) the MWP vanishes in all countries. These results demonstrate that the MWP is not causal, but most likely due to selection of men with steeper wage growth into marriage.
Second, we ask whether similar results obtain for other family transitions like cohabitation and fatherhood. Previous literature using FE reported premiums for these family transitions. We also find such family premiums in most countries which, however, disappear when we use FEIS. Thus, it seems that also these family premiums are not causal but are spurious.

Authors

• Josef Bruderl, University of Munich

• Volker Ludwig, University of Mannheim