April 03, 2008

Married Guys Make More Money Because of the "Marriage Premium"

single guy laundry.jpg

If you're a single guy and a full-time working professional your future income mobility will be retarded because your household lacks a division of labor. Taking care of everything in your household consumes time that you could be using making money. Thomas Sowell reminds of this fact in his new book Economic Facts and Fallacies:

The earning of [family] income can also be a joint enterprise, regardless of whose name appears on the paycheck. Time that a bachelor spends shopping, preparing meals or going out to restaurants, taking his clothes to the laundry or dry-cleaners, entertaining guests or arranging dates, is available to many married men to put into advancing their careers instead, because their wives relieve them of such concerns. Given these and other ways traditional wives have freed up the time of their husbands, it is hardly surprising that married men have usually earned higher incomes than single men of the same age and education. (72)

Wow. This is so ridiculously true. You single professional guys waste so much time running all of your errands and taking care of all of your needs by yourself that you're losing valuable time that you could be doing other productive things.

It would actually be worth the money in the long-run to hire someone to running your errands, clean your house, do your laundry, etc. Not having a division of labor in your house puts you at huge economic disadvantage in terms of your earned income over the long run.

It's what economist call "marriage premium." Wage or earnings models for the United States show that married men earn more than do never-married men. Most models show a premium ranging from 10% to 40% depending on the time period, sample examined, and model specification (Goldin, 1990; Gray, 1997; Loh, 1996).

I lived in a house with a group of guys once where it was cheaper (in terms of time) to hire someone to clean the house and do our laundry for us than to waste time doing it ourselves. Marriage professionals are more free than they realize with their "marriage premium."

Posted by anthony at April 3, 2008 11:16 PM | TrackBack
Comments

even better than division of labor is to get married and be DINKS: Double Income, No Kids--THEN source out the labor and watch the money roll in!

Posted by: Jake at April 3, 2008 11:38 PM

I'm no economist, but it seems a bit unrealistic to think of the entire "marriage premium" in terms of opportunity cost. It certainly makes sense that married men might make more (in professional fields), than unmarried men because of the division of household labor. But, at the same time, this increase in income does not necessarily translate into an increase in disposable income, especially when children are added to the mix.

Being a married guy who now has a child, I can tell you that my health insurance premiums have doubled, my grocery bill has increased by 30-40% (formula, baby food, and diapers), I pay far more insurance co-pays than I used to (darn kid keeps wanting immunizations!), and all this is assuming that everyone else stays healthy. Not to mention the terrifying prospect of college/car insurance/teenage eating habits.

So, while married men might have more time/energy to devote to career due to a division of household labor, I have to at least point out that advantage might not mean more cash-in-hand.

Of course, I say all that without statistics. Just a thought.

Posted by: Todd Gwennap at April 4, 2008 12:46 AM

I'm with Todd on this.

And beyond what he said, any married professional man who wants to stay married, probably better develop a real relationship with his wife and family, which takes a sizable investment of time.

I guess I'm not sure I'm buying the argument in the first place. Some married guys work 40 hours a week, some work 80 hours. Same with single guys. Maybe a married guy doesn't have to cook or do laundry, but he does have to help with his kids' homework and mow the lawn and change the oil in his wife's car. It seems to me that everyone just works what he works and then finds time to do the other stuff that has to get done.

I'm not arguing against marriage, and I'm certainly not arguing against a wife's contribution. But there are only 24 hours in a day and I don't know many people who wouldn't want a few more.

Posted by: nick at April 4, 2008 01:45 AM

...and what is the opportunity cost for the wife, who was likely in the workforce before she married? While I certainly believe there should be a division of labor in a household, to do so on such strict, traditional gender lines, as it appears you have done, seems to devalue women and base her worth solely on what she can do to help her husband. You've essentially turned a wife into a maid...

"Given these and other ways traditional wives have freed up the time of their husbands, it is hardly surprising that married men have usually earned higher incomes than single men of the same age and education."

While this may "marriage premium" may be great for married men, what about unmarried women or married women to men who hold traditional views regarding the division of labor in the workforce? It seems to set up a system in which women will never have the same amount of time and will find themselves running in circles to ever catch up with their male counterparts.

...I guess I say all this to say that this marriage premium seems to be based on very sexist premise.

Posted by: Tam at April 4, 2008 06:26 AM

Todd, in economics the marriage premium is not about "cash" but earned income (salary) over time. Married men don't necessarily (especially in our culture) use their earned income for cash outlays. Also the "marriage premium" does not assume that wives don't work to offset some of those expenditures. Remember in actual America is rare for a wife not to work.

Posted by: Anthony at April 4, 2008 08:58 AM

Nick said, "I guess I'm not sure I'm buying the argument in the first place."

Nick, sorry, it's a pretty old discussion in economics and sociology. This isn't new. The actual data from government labor statistics is where this stuff's derived from.

Actually, married men do not have to do any of the things you listed and most men do not help with homework because many will be at work in the first place. I can only remember a couple of times my dad helping me with my homework. And after a few years I took care of the yard. Also, many of things you mentioned are outsourced which explains, in part, the huge proliferation of lawn care services. It's actually cheaper in the long-run to outsource that stuff, even paying a tutor, to do the stuff you mentioned if it means you can stay at work longer during the week and increase your base salary and income potential.

A young married attorney who is trying to make partner, for example, is working a lot of hours and his wife is making his long work hours possible by running errands, take the car to be serviced, etc.

This is based on real, factual data see Goldin, 1990; Gray, 1997; and Loh, 1996.

Posted by: Anthony at April 4, 2008 09:28 AM

Tam, this has absolutely nothing to with "sexism" and to hear that is missing the point. Seems like you may have bought into many fallacies and made need to read his chapter "Male-Female Facts and Fallacies" in the book.

Your premise that it "seems to devalue women and base her worth solely on what she can do to help her husband. You've essentially turned a wife into a maid."

Did anyone actually say that. It's not a value statement is a statement of how people actually live in the real world. That's what economists do. There are many women that choose to support their husbands because they are happy to do so. That's not being a maid, is it?

And I would love to see the data you have about women's labor force participation rates. As you know, WWII was a major shift in women's work force participation. It went down after WWII because women started to work less and get married at a younger age. Also, becoming a mother significantly effects a woman's future earnings and progress in the marketplace professionally.

I'm sure you're familiar with the government's labor force statistical data on never-married women. They advance income and status just as far as men.

Again, it might be good to read real data to avoid arguing from hearsay and unquantified rhetoric. It's chapter 3 in the book and you can check his references yourself. A sexist premise, what? He's crunching numbers.

Posted by: Anthony at April 4, 2008 09:41 AM

Hey Anthony,

I don't doubt that this is a documented phenomenon, or even "old hat" accepted socio-economic truths. But does that make it a desirable option?

I agree that yeah, outsource what you can, in terms of errands and such. And if all we're talking about is salary phenomenons, then I guess there's nothing really to comment/debate/critique...its just a fact.

But I wonder how much of this desire to increase salary, divide labor and increase vocational experience/expertise, is also linked to the absence of father figures within the typical American household.

I get antsy with "division of labor" language in the context of marriage. As a husband, even if its the conversation I'm having with my wife, if I view my role to go out and work, and bring in the money, and my wife to take care of everything else concerning the household, not only will I be distant from the home when I am "away", but also my wife (She's the labor force at that point, not my wife), and this carries over to the times when I am at home as well.

And then factor in children...Is it really desireable that Dad isn't there to help with homework, because he's working to advance his career?

Just some thoughts from a husband/father, non-economist.

Posted by: Chris Gensheer at April 4, 2008 10:09 AM

"Actually, married men do not have to do any of the things you listed and most men do not help with homework because many will be at work in the first place."

Who are these married men and where did they find these superwomen? From my own experience, by the time the fourth arrow is added to a guys quiver it takes both husband and wife working at home to get everything done. I am not arguing with the data, just saying that the data is probably based on a perception of married life that might not be working out that way in many cases.

"I can only remember a couple of times my dad helping me with my homework."

Dude, as a father and a former educator, I am sorry. I think this would be an example of the fact that just because something might be a good financial move, that alone doesn't make it an overall good move.

Posted by: Jason at April 4, 2008 11:01 AM

Fun topic. I can think of some other elements to add to add to the "marriage economic" valuation and they have little to do with laundry and dishes.

Anthony's pragmatic evaluations that he points out have merit, but I believe value goes far beyond these points.

My wife and I tend to love and support one another. We don't do it so very well sometimes but we both benefit in the fact that we at least commit to this. Knowing someone is looking out for you, going to love you even when you've screwed up, care for you when your ill, give you affection when there's nothing else to say has far more value than clean shirts and dinner on the table.

To one of the side conversations:
My dad did not help with homework - I feel sorry that he didn't value his imput enough to do so. His lack of participation had nothing to do with his career. For me to use my "career" as an excuse to propagate that trend would be a shame.

Posted by: stelmodad at April 4, 2008 11:04 AM

No, none explicitly said that you turning a wife into a made, but when you talk about hiring someone to do your biding and how much doing so helped you and your pals in the same post as you talk about the "marriage premium", it's pretty easy to make that connection.

Also, your patronizing attitude exhibited in your response, both to this post and other ones where I *dare* question or challenge something you said, is pretty telling.

I haven't seen the particular BLS data that you are referring too, but it doesn't surprise me and it makes sense. However, if you are lauding the benefits of marriage to men's earning potential because they have someone at home to do their bidding, don't be surprised when someone challenges you on that premise.

Data can be manipulated to tell a specific story depending on your starting point. You know that as well as I do, so don't act like data is neutral. Just because the data presents something as fact, does not mean that the question cannot be asked and a critique can't be made that the data does draw some sexist conclusions.

...but then, if you are of the same traditional and conservative mindset as Sowell, it is understandable that you wouldn't see that.

Posted by: Tam at April 4, 2008 12:06 PM

Tam, haha, hilarious. Go read the Sowell book first and then we can discuss this after you have some data. This has nothing to do with sexism. Economists don't conjecture traditions or value judgments about things. I don't know why people read sociological categories into economics. Read the chapter and tell me where the sexism is?

Posted by: Anthony at April 4, 2008 02:05 PM

Jason, slightly different but there are many, many single moms with 3,4,5 kids that run their homes without men

Posted by: Anthony at April 4, 2008 02:09 PM

Yeah Stemlo, this is purely about the economics. Great points!

Posted by: Anthony at April 4, 2008 02:10 PM

What about the intangible benefits that a man would receive from running his own errands and working around the house? There's another opportunity cost here for the potential husband. This was one of Marx's critiques of capitalism; it divides labor into specialized vocations so that someone gets really good and cutting the wire for pins and nothing else. This is an overstated example, but the basic principle of the thing is still here. One example for this situation would be a "food tastes better when you've made it." Maybe it would be more humanizing for this guy to earn less money but receive the benefits of cooking for himself, etc. Just a thought to stir things up...not that Anthony's blogs typically need help inciting controversy...

Posted by: Joshua Barrett at April 4, 2008 02:38 PM

Thanks for the homework assignment. Funny, I thought you wanted commentary based on WHAT YOU WROTE; yet because I challenge the conclusions you gave, you tell me to go read the book.

Interesting....

I'm not an idiot, and I'd appreciate you not patronize me. Especially, considering that was not the spirit in which I initially came to you. I know what economics is. And, because of that, I know that economics has sociological implications. That is what I am speaking to.

Posted by: Tam at April 4, 2008 02:52 PM

Joshua, hmm, very good point about the opportunity cost.

Posted by: Anthony at April 4, 2008 03:24 PM

Tam, huh?? What did I write? The blocked-quote is from Thomas Sowell's book. Quote the part where I was sexist? I'm not following your objection? Patronizing? How?

This is a discussion about economic trade-off is you're doing "x" you can't do "y."

I don't get the sexism objection at all. The post is about the book. Anyway. . .

Posted by: Anthony at April 4, 2008 03:31 PM

I didn't say YOU are was sexist (though, after this exchange I'm beginning to wonder...), I said the implications of the "marriage premium", with the examples that you gave are.

Assuming that the only way to address division of labor is to either (a) get a maid or (b) get married so that the they, the women in a man's life, can do all of those pesky tasks that keep him from doing "real work", is at it's core sexist.

I'm not arguing the facts or the data. What I am arguing is what that data means, what it points to. And essentially, what it points to and legitimizes is a very traditional and narrow definition of women's roles both in the home and in the workplace. Those implications for me, as a woman, particularly as a Christian woman, are troublesome.

In terms of patronizing what was patronizing, the dismissive tone of your email and your instruction of me to go read the book, and insinuating that my point is laughable is very patronizing. It is unfortunate that you can't see that.

Posted by: Tam at April 4, 2008 04:08 PM

Antonio, all that is keep you from paying off school debt and driving the BMW 135I is una esposa que trabaja...que esperas?

Posted by: berkeleyrican at April 4, 2008 05:14 PM

Tam, sorry you felt patronized. I still don't get the implied sexism resulting from people's free choices. I don't think Sowell's implications in the book are sexist because he's giving data almost exclusively. I'm open to hearing how he's sexist after reading the book. You've got a bone to pick on this issue about "traditional" roles and so on, so I'm dropping this thread and moving on.

Posted by: Anthony at April 4, 2008 06:08 PM

berkeley, claro!! Ahora, no hay espero para mi. Mas tarde, quisas.

Posted by: Anthony at April 4, 2008 06:12 PM

Sowell is a genius. I just finished my ninth book of his and "Knowledge and Decisions" arrived in the mail. Think Economic Facts and Fallacies is worth the cash if I've read Basic and Applied Economics?

Posted by: Oesch at April 4, 2008 07:07 PM

oesch...i'm wondering the same myself.

Posted by: shawn at April 7, 2008 05:32 PM

Ahh, guys, every Thomas Sowell reading is worth it!! Hello, it's Sowell! It's full of updated information! Woot, woot!

Posted by: Anthony at April 7, 2008 05:35 PM

incidentally...sowell was just on econtalk.

Posted by: shawn at April 8, 2008 08:22 AM
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