Working Paper, Federal Reserve Bank of Atlanta 97-5a
In standard cross-sectional wage regressions, married men appear to earn 10 to 20 percent more than comparable never-married men. One proposed explanation for this male marriage premium is that men may be selected into marriage on the basis of characteristics valued by employers as well as by spouses or because they earn high wages. This paper examines the selection hypothesis using a "natural experiment" that may make marital status uncorrelated with earnings ability for some men. We compare the estimated marriage premium between white men whose first marriages are followed by a birth within seven months and other married white men in the United States. Married men with a premarital conception generally have a lower return to marriage than other married men. Our results suggest that a substantial portion of the marriage premium is due to selection.