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The Marital Earnings Premium: An IV Approach

Dr Miguel Olivo-Villabrille

Miguel Olivo-Villabrille 

Abstract:  Numerous studies find that married men earn more than single men. However, identifying whether and why marriage a↵ects earnings is complicated by the fact that marriage market outcomes are jointly determined with potential earnings. As such, I exploit exogenous variation in marriage induced by the introduction of no-fault divorce laws in the US. I find a 38% causal increase of marriage on earnings of husbands. This increase in earnings is explained by a large increase in labor market work after marriage. My findings are robust to the possibility of unobserved heterogeneity in the effect of marriage on earnings across individuals.

Keywords: Marital earnings premium, marriage, divorce laws, local average treatment effects.



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