What Are the Economic Benefits of Marriage?

By Damon Gacicia

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Gray’s "Declining Productivity Effects or Changing Selection?," Cornwell and Rupert’s "Unobservable Individual Effects, Marriage And the Earnings of Young Men," Waite’s "Does Marriage Matter?," and Schoeni’s "Marital Status and Earnings in Developed Countries" agree that there are economic benefits to entering into a marriage contract. Since the nineteenth century, it has been proven that married men earn higher wages than unmarried men. In all fourteen countries that Schoeni studies there is a positive relationship between marriage and higher wages, increased wealth, and increased savings. The measure used to determine the differences in wages between those married, cohabiting, and not married is called the "wage premium." The wage premium is the most important element in determining whether or not there are economic benefits to being married. There are several benefits from marriage that are not related to wealth but to personal well-being. These include lower mortality rates, healthier life styles, better child rearing, and a better sex life. The specialization hypothesis and selection hypothesis are two very important theories that help explain the "wage premium." The specialization hypothesis states that each spouse can specialize in tasks that they are better suited for which would increase wealth and wages. The selection theory states that women choose their marriage partner based on their potential for wage earning. The selection theory shows that people are selected for marriage based on economic reasons. It appears with a further look into the subject that both theories are working at the same time.

"Wage premium" measures the difference between the wages of people who are married, cohabiting, divorced or separated, widowed, and never married. The wage premium allows economists to compare the earnings of these different groups. By looking at these wage premiums, there is evidence that marriage does have certain economic benefits. The premium is fiver percent to seven percent (Cornwell and Rupert), which represents the benefit that married people have over the other groups (listed above). This figure shows that married people do have higher wages, which lead to increased wealth and savings. More specifically black married men have a positive wage premium of 4.5% while white married men have a positive wage premium of 6.3% when looking at the hourly wage for both groups of men (Waite). Black married women have a positive wage premium of just about 3%, while white married women have a negative wage premium over 4% when looking at the hourly wage of each worker for both groups of women (Waite). Certainly, there are economic benefits shown through the wage premium but there are other benefits created by marriage that may not show up on the balance sheet.

Waite’s "Does Marriage Matter?" points out many other benefits that are associated with marriage that may affect a person economically but at first glance are not economical in nature. First, Waite found that married people have healthier behaviors than divorced or widowed people. Alcohol problems are much lower for married men than men who have been divorced or widowed. For women there is not much change between these different groups although divorced women are highest group when looking at alcohol problems. In addition, married men and women are much less likely to undertake activities with high risk. For instance, married people are much less likely to get into accidents, start fights, and drive too fast. Waite found that marriage promotes a healthy lifestyle due to lower substance abuse problems, lower risk-taking behaviors, and the ability of married men and women to live organized lives. Secondly, mortality rates for married men and women are lower than divorced, widowed, and never married men and women. Lower mortality rates for married men and women can be connected with the first benefit of marriage that married people lead healthier lifestyles. Both married men and women have the lowest mortality rates when compared to widowed, divorced, and never married men and women. The highest mortality rates are found in men and women who have never been married. Healthier lifestyles are not the only reason for married men and women to have the lowest mortality rates. Marriage increases income, assets, and wealth, which can be spent on better "medical care, better diet, and safer surroundings" (Waite). Married people are better economically suited to take care of themselves and therefore live longer. The other reason for lower mortality rates amongst married men and women is that marriage creates a support system. This support system can help especially in time of high stress and illness, which could increase the life span of an individual. The last non-economic benefit of marriage is in a lifetime sex partner. The frequency of sex for a married couple per month is 6.84 for men and 6.11 for women, which are about double that of single men and women and just below that of cohabiting men and women. Married couples were more satisfied with their sexual activity than single people or cohabiting people. The emotional attachment and long-term commitment experienced by married couples affects the frequency and satisfaction of sex (Waite). These are all benefits, which are shared by married couples. To help understand the economic benefits and non-economic benefits of marriage it is important to understand the specialization and selection hypotheses.

One theory of the benefits to marriage is the specialization hypothesis. The wage premium for married men and women is argued to come from the specialization hypothesis. Specialization could also be called "spouse specialization" because as couples enter into marriage each spouse is able to concentrate their skills on the areas they are better suited for. For instance, a single male has to work to support himself financially and take care of household chores in his time away from the office. The benefit from marriage in this scenario is that the male would work but not have to worry about household chores. Assuming his spouse would specialize her work in the house this would allow the male more time to spend concentrating on his work. With this extra time available, to focus on their "labor market activities" as a result of this hypothesis men become more productive at work (Gray). Specialization theory should cause an increase in the wage premium because married households would be more productive. The fact is that married households are more productive the question is whether or not there increased wealth comes from specialization or other factors. Recently, with the increase of women in the labor force there should be a fall in the wage premium if the specialization theory does hold. The wage premium would fall because men would have to focus more of their time on household chores rather than solely on their work. However, their wives’ wage may compensate for the husband’s lack of productivity. In actuality, the statistics do show a drop in the wage premium due to the lack of specialization caused from women entering the work force. Another reason for the decline in the wage premium is a decrease in the return from specialization. Divorced males also suffer in their wage after they get divorced. The lack of specialization for divorced men can cause wages to decrease. Now, after divorce men have to spend more time on household chores such as cleaning, washing clothes, and making dinner that most likely were taken care of by his wife when he was married. The specialization theory is one explanation for the increase in the wage premium and is another benefit of marriage.

The selection hypothesis shows that benefits of marriage are determine before the contract of marriage is undertaken. The selection theory suggests that only the most productive and responsible men are chosen for marriage. This contradicts the idea of the theory of specialization that men become more productive after they have entered into a marriage. Recently, the wage premium has declined which is not an affect of the selection theory (Gray). The decline in the wage premium is more likely a result of women entering the work force effecting "spouse specialization" or there has been a decrease in the returns from specialization. Between 1975 and 1976, high wage growth has decreased the probability of a man being married between 1976 and 1980 (Gray). However, "between 1988 and 1989, higher wage growth has had a positive impact on the likelihood that a man will be married between 1989 and 1993" (Gray). Therefore, the selection of high wage earners into marriage will only increase the wage premium. This shows that the selection theory cannot be viewed as the cause for the recent decline in the wage premium. The selection theory certainly shows that it can have a positive effect on the wage premium because as people pick their marriage partner more selectively there will be an increase in productivity on average for married couples. This increase in productivity will cause wages to increase, which will raise the premium. The theory does suggest that the institution of marriage does nothing to change productivity but that partners are selected because of skills and productive capacity they already have. However, the selection hypothesis can make people more interested in increasing their skills and productivity so that they will be selected for marriage.

The presence of children has been found to increases wages especially where the child grows up with both parents. Children will make men spend more time on their work because of the added costs of children (Cornwell and Rupert). Males feel the responsibility to provide for their child and therefore will spend more time in the office and behave more responsibly for example he may be more aware of showing up to work on time. Economically through increased wages due to increases in productivity, children are a benefit that comes from marriage. However, marriage can also benefit the child. First, two parent families between blacks and whites are less likely to suffer from poverty if they have a child. A child that is not living in poverty is better off than a child who grew up in poverty. The reasons are clear because of better education, nutrition, and health care to name a few. Second, the percentage of children that drop out of school greatly decreases when two parents are present. Therefore, marriage can greatly influence the education of a child, which should affect his future productivity and wealth. It is clear that children benefit from two parent homes because they will receive more attention, better education, and better moral guidance. Also, marriages benefit from having children because it increases the productivity of the parents, which increases wages.

There certainly are benefits to marriage that are both economic and social. First, marriage promotes a healthier lifestyle. The facts show less substance problems for those who are married. There are lower mortality rates for those who are married because married couples are more likely to afford medical care and have support systems. Sex is more satisfying and more frequent for married people because of the emotional long-term attachment. These factors and children can affect the productivity of married couples. The wage premium shows that on average married people do earn higher wages than non-married people. The suggested reasons for the wage premium are the specialization hypothesis and the selection hypothesis. Specialization allows for higher productivity out of the working partner assuming the other partner takes care of household chores so that the working partner can focus more on his or her job. Selection assumes that people pick partners based on their productivity. In other words, people select partners who are productive therefore marriage does not affect productivity but that productivity already exists. The source of the wage premium is still a debate between these two theories and other random sources. However, there are certainly benefits from marriage seen through increased wages and wealth.

1 Linda J. Waite, "Does Marriage Matter?" in Demography, Vol. 32, No. 4, November 1995, pp. 483-507

2 Robert F. Schoeni, "Marital Status and Earnings in Developed Countries", Journal of Population Economics, Vol. 8, 1995, pp. 351-359.

3 Jeffrey S. Gray, "The Fall in Men's Return to Marriage: Declining Productivity Effects or Changing Selection?", The Journal of Human Resources, Vol. 32, No. 3,

1997, pp. 481-504.

4 Christopher Cornwell and Peter Rupert; "Unobservable Individual Effects, Marriage and the Earnings of Young Men", Economic Inquiry, Vol. 35, April 1997, pp.

285-294.