Job Turnover, Wage Rates, and Marital Stability: How Are They Related?

Avner Ahituv () and Robert I. Lerman ()

No 1470, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: This study examines the interplay between job stability, wage rates, and marital instability. We use a Dynamic Selection Control model in which young men make sequential choices about work and family. Our empirical estimates derived from the model account for selfselection, simultaneity and unobserved heterogeneity. The results capture how job stability affects earnings, how both affect marital status, and how marital status affects earnings and job stability. The study reveals robust evidence that job instability lowers wages and the likelihood of getting and remaining married. At the same time, marriage raises wages and job stability. To project the sequential effects linking job stability, marital status, and earnings, we simulate the impacts of shocks that raise preferences for marriage and that increase education. Feedback effects cause the simulated wage gains from marriage to cumulate over time, indicating that long-run marriage wage premiums exceed conventional short-run estimates.

Keywords: marriage and marital dissolution; job turnover; wage rates; panel data (search for similar items in EconPapers)
JEL-codes: C15 C33 J12 J31 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp and nep-lab
Date: 2005-01
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