Testing Becker's Theory of Positive Assortative Matching

Aloysius Siow

Working Papers from University of Toronto, Department of Economics

Abstract: In a static frictionless transferable utilities bilateral matching market with systematic and idiosyncratic payoffs, supermodularity of the match output function implies a strong form of positive assortative matching: The equilibrium matching distribution has all positive local log odd ratios or totally positive of order 2 (TP2). A strong form of a preference for own type implies supermodularity of the match output function. It has additional restrictions on local odds ratios. Local odds ratios are not informative on whether a bilateral matching market equilibrates with or without transfers. Using white married couples in their thirties from the US 2000 census, spousal educational matching obeyed TP2 except for less than 0.2% of marriages with extreme spousal educational disparities. Using the TP2 order, there were more positive assortative matching by couples living in SMSA's than those who do not; but not more positive assortative matching in 2000 than in 1970. There were increases in specific local log odds over that period.

Keywords: matching; marriage; education; local log odds; TP2; United States (search for similar items in EconPapers)
JEL-codes: J1 C51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu and nep-lab
Date: 2009-04-15
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