Abstract
This thesis consists of three chapters. In Chapter 1, I explore the effects of educational assortative matching on household income inequality. Income differences across households are larger the more similar are the earnings potentials of breadwinners within the household. As such, the tendency for individuals to marry people similar to them has likely served to amplify inequality across households. In this paper, I study the effect that educational assortative matching has on income inequality in the United States. Quantifying this effect presents a serious empirical challenge because education and marriage patterns are jointly determined equilibrium outcomes. Observed patterns of marriage are an outcome of a two-sided dynamic matching process. Individuals on both sides of the market take as given the distribution of available singles at each point in time. Anticipating this process, forward looking individuals make pre-marital investments in human capital to improve future prospects on the marriage and labor markets. As such, I develop a dynamic discrete choice model of endogenous educational attainment and subsequent marriage market matching. I estimate the parameters of the model using US Census data combined with information on marriage registrations. I use the estimated model to perform a series of counterfactual experiments that help quantify the role of female educational attainment and assortative matching on education in amplifying income inequality across households.
Chapter 2 causally identifies the effect of marriage on the earnings of men. Conventional wisdom suggests and numerous studies find that married men earn more than single men. However, identifying whether and why marriage affects earnings is complicated by the fact that marriage market outcomes are jointly determined with potential earnings. To address this issue, I exploit exogenous variation in marriage induced by the geographically-staggered introduction of no-fault divorce laws in the United States over two decades. I find an average causal effect of marriage on earnings. I find that marriage causes a 32% increase in the earnings of husbands. This increase in earnings is explained by a large increase in labor market work after marriage. My findings are robust to the possibility of unobserved heterogeneity in the effect of marriage on earnings across individuals, and support the idea that husbands specialize in labor market work.
Chapter 3 explores the labor market consequences of an immigration reform. In 2010, the Arizona legislature passed reforms aimed at curtailing illegal immigration. Using two empirical methods, this paper provides the first estimates of the anticipatory labor market effects of the bills, both isolating the policy change in 2010 as well as a more comprehensive analysis taking into consideration the introduction of E-Verify requirements by employers in 2008. The results indicate an overall deterioration of the employment probabilities of several demographic groups, including foreign-born Hispanics and native-born non-Hispanic whites, after the policies when compared to a counterfactual of no intervention at all. When isolating the effects of the bills passed in 2010, there is an increase in the probability of employment for foreign-born naturalized white Hispanics compared to foreign-born non-citizens Hispanics. However, none of these results are significant at conventional levels.
