Job displacement, remarriage and marital sorting

Hanno Foerster, Tim Obermeier and Bastian Schulz

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We investigate how job displacement affects whom men marry and study implications for marriage market matching theory. Leveraging quasi-experimental variation from Danish establishment closures, we show that job displacement leads men to break up if matched with low-earning women and to re-match with higher earning women. We use a general search and matching model of the marriage market to derive several implications of our empirical findings: (i) husbands' and wives' incomes are substitutes rather than complements in the marriage market; (ii) our findings are hard to reconcile with one-dimensional matching, but are consistent with multidimensional matching; (iii) a substantial part of the cross-sectional correlation between spouses' incomes arises spuriously from sorting on unobserved characteristics. We highlight the relevance of our results by simulating how the effect of rising individual-level inequality on between-household inequality is shaped by marital sorting.

Keywords: marriage market; sorting; search and matching; multidimensional heterogeneity (search for similar items in EconPapers)
Date: 2024-10-28
New Economics Papers: this item is included in nep-dge and nep-lab
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https://cep.lse.ac.uk/pubs/download/dp2045.pdf (application/pdf)

Related works:
Working Paper: Job Displacement, Remarriage, and Marital Sorting (2024)
Working Paper: Job Displacement, Remarriage, and Marital Sorting (2024)
Working Paper: Job displacement, remarriage and marital sorting (2024)
Working Paper: Job Displacement, Remarriage, and Marital Sorting (2024)
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