Stuck for Life: A Firm-Specific Human Capital Explanation of the Male Marraige [i.e., Marriage] Premium

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2008
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Haverford College. Department of Economics
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Thesis
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The Holland Hunter 1943 Economics Department Thesis Prize
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eng
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Open Access
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Abstract
I argue that household specialization and investment in firm-specific human capital explain the male marriage premium. First I develop a model of human capital in which to-be-married men invest in human capital over two rounds. The promise of high returns to the second round of investment encourages firms to offer high wages before the first round, so that wages not change upon marriage. The model has two other predictions, that among the self-employed wages should increase upon marriage, and that the cross-sectional marriage premium should have declined over time. Using the Panel Study on Income Dynamics and the 2000 US Census, I find evidence in support of each of these predictions. Evidence from the self-employed suggests that marriage increases productivity by 20%, via the increased accumulation of human capital.
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