In this paper we document that married individuals face a lower unemployment rate than their single counterparts. We refer to this phenomenon as the marriage unemployment gap. Despite dramatic demographic changes in the labor market over the last decades, this gap has been remarkably stable both for men and women. Using a flow-decomposition exercise, we assess which transition probabilities (across labor force states) are behind this phenomenon: For men, the main driver is the higher job losing probabilities faced by single workers. For females, the participation margin also plays a crucial role.
We thank the comments of the editor, Karel Mertens and one anonymous referee. We are indebted to Nezih Guner, Stefania Albanesi, Yuliya Kulikova, Joan Llull, Brendon McConnell, and seminar participants at UAB, CEA-Universidad de Chile, ENTER Jamboree 2013, 2014 SAEe, University of Southampton, and the 2013 SED meetings in Seoul, South Korea for thoughtful comments and discussion. Sekyu Choi gratefully acknowledges financial support from the Spanish Ministry of Economy and Competitiveness through grant ECO2012-32392 and through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2011-0075). All errors are ours.
A.1 Figures of non-adjusted data
A.2 Our method of controlling for observables vs. marginal effects probit
In this section we compare our method to control for observables and the results from a Probit regression. Figure 11 compares the difference between the unemployment rate of single and married individuals in our adjusted sample with the marginal effect of being single in the following Probit model:
where U is a dummy variable that takes value 1 if the individual is unemployed and 0 otherwise, single is a dummy variable taking value 1 if the individual is not married and 0 otherwise, the vector is the set of observable characteristics we use in the construction of our adjusted sample, and Φ is the Cumulative Distribution Function of the standard normal distribution. We estimate the probit model by maximum likelihood.
In the adjusted sample, both married and single individuals present the same observable characteristics. Hence, the difference between the unemployment rate of single and married individuals reflects the different probabilities of being unemployed conditional on observables. This is equivalent to estimating the Probit model in Equation 3 and computing the marginal effect of being single (or married) controlling for observables. These results indicate that, both the exact matching method we use to control for the effects of observables and using a Probit model to clean out the effects of observables, deliver similar results. We choose to use exact matching because it does not require to assume a particular parametric relationship between observables and labor market outcomes.
A.3 Gaps in transitions
A.5 Decomposition exercise for females from 1985
|Transition||1980 onwards||1985 onwards||All sample|
A.6 Composition of the EU transition
We use the CPS information on the reason of job separation to compute the share of individuals in the EU transition that report layoff, quit, or other as the reason for their job separation.
Abowd, J. M., and A. Zellner. 1985. “Estimating Gross Labor-Force Flows.” Journal of Business & Economic Statistics 3 (3): 254–283. Search in Google Scholar
Albrecht, J., A. Anderson, and S. Vroman. 2010. “Search by Committee.” Journal of Economic Theory 145 (4): 1386–1407. Search in Google Scholar
Angrist, J. D 1998. “Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants.” Econometrica 66 (2): 249–288. Search in Google Scholar
Antonovics, K., and R. Town. 2004. “Are All the Good Men Married? Uncovering the Sources of the Marital Wage Premium.” American Economic Review 94 (2): 317–321. Search in Google Scholar
Attanasio, O., H. Low, and V. Sánchez Marcos. 2008. “Explaining Changes in Female Labor Supply in a Life-Cycle Model.” American Economic Review 98 (4): 1517–1542. Search in Google Scholar
Choi, S., A. Janiak, and B. Villena-Roldan. 2015. “Unemployment, Participation and Worker Flows Over the Life-Cycle.” The Economic Journal 125 (589): 1705–1733. Search in Google Scholar
Darby, M. R., J. C. Haltiwanger, and M. W. Plant. 1986. “The Ins and Outs of Unemployment: The Ins Win.” National Bureau of Economic Research, Inc. NBER Working Papers 1997. Search in Google Scholar
Ek, S., and B. Holmlund. 2010. “Family Job Search, Wage Bargaining, and Optimal Unemployment Insurance.” The B.E. Journal of Economic Analysis and Policy 10 (1): 47. Search in Google Scholar
Elsby, M. W., B. Hobijn, and A. Sahin. 2015. “On the importance of the Participation Margin for Labor Market Fluctuations.” Journal of Monetary Economics 72: 64–82. Search in Google Scholar
Greenwood, J., and N. Guner. 2008. “Marriage and Divorce since World War II: Analyzing the Role of Technological Progress on the Formation of Households.” NBER Macroeconomics Annual 23: 231–276. Search in Google Scholar
Greenwood, J., A. Seshadri, and M. Yorukoglu. 2005. “Engines Of Liberation.” Review of Economic Studies 72: 109–133. Search in Google Scholar
Guler, B., F. Guvenen, and G. Violante. 2012. “Joint-Search Theory: New Opportunities and New Frictions.” Journal of Monetary Economics 54 (4): 352–369. Search in Google Scholar
Poterba, J. M., and L. H. Summers. 1986. “Reporting Errors and Labor Market Dynamics.” Econometrica 54 (6): 1319–1338. Search in Google Scholar
Shimer, R 2012. “Reassessing the Ins and Outs of Unemployment.” Review of Economic Dynamics 15 (2): 127–148. Search in Google Scholar
Stevenson, B., and J. Wolfers. 2007. “Marriage and Divorce: Changes and Their Driving Forces.” Journal of Economic Persectives 21: 27–52. Search in Google Scholar
©2018 Walter de Gruyter GmbH, Berlin/Boston