How much does assortative mating matter for income inequality?

The astute Kurt Mitman noted that Greenwood, et.al. issued a later corrective (pdf) to their earlier 2014 AER piece (ungated here), and therefore their estimates in that piece (which I very recently cited) contain no real information.  I apologize for having cited the piece, as I was not aware of the later correction.

It would be incorrect to conclude, however, that assortative mating has no connection to income inequality.  Some of the other evidence for that connection is cited in my piece, but more specifically Greenwood et. al. have since revised their own revision (pdf), and produced a more integrated model.  A gated version of this piece was just published in American Economic Journal: Macroeconomics this last week.

In the integrated model, the focus is on family and labor supply decisions more generally.  For instance, let’s say a couple keeps its income up by not divorcing: is that “no divorce” or rather “assortative mating” which is contributing to income inequality?  After all, high income, high education, well-paired couples do divorce a lot less, so that may be a semantic distinction from a causal point of view.  The authors suggest that their integrated family model explains about a third of the rise in income inequality from 1960-2005 (see for instance p.46, with a summary of their overall approach and results starting on p.47), and assortative mating is very much a part of their bigger-picture story.

Comments

1) Is education the right variable of assortative mating? Or the increase assortative mating today simply the ending of job discrimination? In the 1950s women had less opportunities in the job market so the data could be showing these realities and not an increase of assortative mating. (Also assortative mating before 1950 was the rule of society.)

2) I don't think the big change is assortative mating but most people are meeting their spouses later in life. So spouses are meeting around 24 - 27 when their lives and personalities are more solidified and circle of friends starts decreasing than in High School & College.

Anyway, the divorce rate has dropped a lot since 1979 so it is hard to fault this is a 'bad' trend.

http://www.businessinsider.com/28-people-marry-attended-same-college-2013-10

28% of married couples attended the same college.

This seems like an attempt to define assortive mating in a way that will get them the same result of their previous retracted papers. After two chances at a simpler model why would we trust them to run a more complicated model? How bad do we want to believe assortive mating explains income inequality?

"Assortative" just seems to vague a term to be able to answer the question.

If all that is meant is, "Has the rise of the power couple contributed to rising household income inequality," I'd say the answer is obviously yes, the growth of double-high-income households undoubtedly has increased the Gini coefficient of household incomes, and that should not be hard to prove. But that's a very narrow category of assortative mating. Apparently these researchers are looking for evidence of something broader, and struggling.

Cowen is likely correct about assortative mating and inequality, but I would expect differences as couples move up the income ladder. I know many similarly educated couples with similar career paths, but once children arrived, their paths diverged, diverged because you can't raise children who will end up at Yale if they spend much of their time at child care or with the nanny. Successful, well-adjusted children don't just happen, they are nurtured, nurtured by parents. No, you can't have it all power couples. Further up the income ladder, however, career and child rearing can be more easily accommodated - see Marissa Mayer. I will be curious to see the data for power couple marriages (and divorces) when the power couples are in the empty nest. The power couple in my family in the First Gilded Age (my maternal grandparents) had an advantage not available today: the spinster sister whose primary role was taking care of the family (including my mother, an only).

It seems like the revised paper is focusing more on the low end of assertive mating: the rise in the unweds, divorced, and multiply divorced couples in the lower educated tiers.

The decline of the traditional family is even starting to hit the middle class and their offspring, which undoubtedly has some impact on the shrinking size of the middle class and movement from the middle class to lower tiers.

My guess is that the increasing divergence in the incidence of marriage (and marital stability) by education and class, with marriage collapsing among the less educated but remaining strong among well-educated high earners, contributes far more to growing inequality than assortative mating.

In fact, there aren't that many high SES couples where both partners earn a lot of money. Couples with less education are more likely to have both spouses working full time. There are just fewer and fewer of those couples, and a growing number of single mothers among people who never finish college. Out of wedlock births are still pretty rare among women who have a B.A., at least among whites and Asians. And that is what makes the difference: two parent families are pulling away from the rest of the population, in all ways. Family breakdown drives inequality more than we want to admit.

Yes. Charles Murray's work is smack dab in the middle of this, but unfortunately it's one of those areas where academic economists have an alarm system in their brains which starts ringing, "This Far But No Farther!"

So, why has the NYT not posted a correction or an editor's note?

David Leonhardt, where are you?

Another angle missing from the assortative mating discussion: wouldn't biological evolution reward for eugenic selection? Or is this one of the Sacred Mysteries where Science cannot explain what is going on? Or maybe it's because evolution ended 100,000 years ago and only happens from the neck down in any event, and Mind has nothing to do with Brain.

BTW, the stereotype of smart people as physically unattractive or socially inept doesn't really hold up.

Some causes of inequality are good. The positive externalities that flow from these marriages is enormous. We should encourage inequality that comes from the right values, such as the commitment to marriage.

The only bad inequality comes from those who buy politicians for favors, protection from competition and business from the state. The single greatest cause of inequality today is the inflationary policy of the Fed. It rewards financial services by giving them the new money before it causes prices to rise. It causes unsustainable booms and inflation that reduces the real wages of most working poor, then causes a recession in which the working poor suffer the most from unemployment.

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