Koen Decancq on Assortative mating and long-term trends in US household earnings inequality

Speaker:  Koen Decancq - University of Antwerp
  Wednesday, May 23, 2012 at 12:30 PM Aula C, Palazzo di Economia

We study the impact of assortative mating on household earnings inequality in the US between 1978 and 2008. A novel copula-based decomposition method is proposed to unravel the impact of three different channels: (1) the changed assortativeness in the marital selection based on demographic variables such as education and race; (2) the changed assortativeness in the joint labor supply decision and (3) the changed assortativeness in earnings in two-earner couples. We estimate a detailed parametric model of the joint earnings distribution of both partners using data from the Current Population Survey (CPS). A counterfactual analysis of this model shows that the contribution of the former two channels is limited, but that the latter channel contributed to about 12% of the observed increase in earnings inequality.

Programme Director
Eugenio Peluso

Publication date
May 23, 2012