What Women Want: Family Formation and Labor Market Responses to Marriage Incentives

Family structure in the United States has shifted substantially over the last three decades, yet the causes and implications of these changes for the well-being of family members remains unclear. This paper exploits task-based shifts in demand as an exogenous shock to sex-specific wages to demonstrate the role of the relative female to male wage in the family and labor market outcomes of women. I show that increases in the relative wage lead to a decline in the likelihood of marriage for those on the margin of a first marriage, and present suggestive evidence that these effects are concentrated among less-desirable matches. A higher relative wage also causes women to increase their hours of work, reduce their dependence on a male earner, and increase the likelihood of taking guardianship over their children. These findings indicate that improvements in the relative wage have facilitated women’s independence by reducing the monetary incentive for marriage, and can account for 20% of the decline in marriage between 1980 and 2010.