Is Marriage a White Institution? Understanding the causes and effects of the racial marriage divide

Nezih Guner and Elizabeth Caucutt

No 681, 2009 Meeting Papers from Society for Economic Dynamics

Abstract: We develop a model economy in the spirit of Caucutt, Guner and Knowles (2002). Each period single men and women with various levels of productivity are matched in a marriage market segmented by age and race. They decide whether or not to marry taking into account what their next best option is. Decisions within the family are made by Nash bargaining. Husbands and wives decide whether to stay married, how much to work, how many children to have, and how much to invest in any children they do have. Single women choose hours to work, how many children to have, and how much to invest in those children, while single men only choose hours. There is a government that taxes and provides welfare benefits to poor, single mothers. Working people accumulate human capital on the job that depreciates. Time and goods investments in children give rise to the productivity levels of the next generation of adults. In our model, work, fertility, and marriage decisions are all interrelated and endogenous. We calibrate this model to be consistent with key marital, fertility, and labor market statistics for the productivity distribution of white men and women found in the United States. We then investigate how much of the racial divide our model can account for by running the model for the productivity distribution of black men and women. We can then study the effects of various government policies on marriage within this framework, and their long term consequences via their effects on investment in children.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed009:681

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