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Title:Is marriage poisonous? - Are relationships taxing? An analysis of the male marital wage differential in Denmark PDF Logo
Authors:Gupta, Nabanita Datta
Smith, Nina
Stratton, Leslie Sundt
Issue Date:2005
Series/Report no.:IZA Discussion Papers 1591
Abstract:The word for 'married' in Danish is the same as the word for 'poison'. The word for 'sweetheart' in Danish is the same as the word for 'tax'. In this paper we expand upon the literature documenting a significant marital wage premium for men in the United States to see if a similar differential exists for married men in Denmark - or if the homonyms have perhaps less of a double meaning. Unlike most other research in this area, our study is based on a large panel sample with complete relationship histories, consisting of about 35,000 young Danish men observed before and after their first marriage or cohabitation during the years 1984-2001. Since the majority of young Danes cohabit before they marry, if they ever marry, cohabitation is allowed for as a separate state. Pooled OLS estimates indicate a marital wage premium of 4-5%, which drops to 2% after controlling for selectivity. The cohabitation premium is found to be of the same size as the marital wage premium. Our results indicate that a part of the marriage or cohabitation premium is not due to marriage or cohabitation itself, but to fatherhood. When information on becoming a father and years spent in fatherhood is added to the empirical model, the results show that fathers receive a 'fatherhood' premium during their first few years as fathers and that the initial marital wage premium is reduced.
Subjects:marriage premium
cohabitation
fatherhood
JEL:J12
J31
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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