An analysis of income differentials by marital status

Abstract

Unmarried cohabitation has become a more frequently observed phenomenon over the last three decades, and not only in the United States. The objective of this work is to examine income differentials between married women and those who remain single or cohabitate. The empirical literature shows that, while the marriage premium is verified in different studies for men, the result for women is not conclusive. The main innovation of my study is the existence of controls for selection. In this study, we have two sources of selectivity: into the labor force and into a marital status category. The switching regressions and the Oaxaca decomposition results demonstrate the existence of a significant penalty for marriage. Correcting for both types of selection, the difference in wages varies between 49% and 53%, when married women are compared with cohabiting ones, and favors non-married women. This result points to the existence of a marriage penalty.

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