Saturday, July 31, 2004

Marriage Gap

This is a re-post (written 3 days ago). Somehow mail-blogging didn't work:

Hal Varian writes about marriage gap in the NYTimes today. (My apologies: I have been blogging through emails; and somehow links don't work -- reason why I don't provide links. But, hey, borrowing from Al Franken: "Let there be Google!". For this Varian's note, however, you can access it easily on his Berkeley website. Otherwise, subscribe to NYT).

As usual, Varian's popular article is not "tasty": you don't get anything until almost at the end of it. So you can skip all the razzle-dazzles in the first 14 paragraphs -- just go to the one started with "Recently two economists...". Got it? Its preceding paragraphs are nothing but: researchers has "agreed" that usually, the wage earned by married men is somewhat higher than those by single men. Many studies have tried to explain the possible causes. Some thinks it has causality; others, mere correlation.

OK now, the economists' research is really interesting. They assumed that -- in Varian's words, "[T]wins have the same genetic endowment and (usually) the same upbringing. Since twins have the same underlying physical and mental capabilities, they should have similar productivity. Even if employers are biased toward certain irrelevant characteristics, monozygotic twins should be affected by such biases equally..." So they go on investigating the wage behavior of identical twins where one is married and the other is not. Conclusion? Yes, marriage does increase your wage!

My take? They still should (seems they did not) control for all fringe benefits provided for married employees: child(ren) benefits, holy-days package for families, maternity fund for the wives, etc. (This may seem strange for some of you; but that's what happens here and other developing countries).

Anyway, if that conclusion were true, why don't you get married multiple times?

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