Essays on the marriage market

This thesis consists of a short introduction and three self-contained chapters. Chapter 1 develops a model of intra-household specialization and human capital formation for couples, taking into account of assortative sorting on income potentials in the marriage market. I assume people are matching on potential wage growth rates which differ across individuals and are realized through actual work experiences. The model is estimated by a simulated minimum distance estimator with PSID data from 1968 to 2011. I find there is strong positive assortative matching on wage growth rates, which helps explain the correlated wage growth residuals of married couples. If matching is switched to random, there will be more variation in household specialization arrangements and higher observed wage growth rates. The estimated elasticity of substitution between market goods and home production is approximately 0.37. Husband's time and wife's time turn out to be complements in the home production function. Chapter 2 studies a marriage market with two-sided information asymmetry in which the gains from marriage are stochastic. Contracts specify divisions of ex-post realized marital surplus. I first study a game in which one side of the matching market offers contracts, and then study a social planner's problem, finding necessary and sufficient conditions for a truthful direct revelation mechanism to achieve matching efficiency. These conditions become more stringent as the number of agents in the matching market increases. Chapter 3 examines the relationship between women's preference towards marriage and her marital outcomes. I propose using the mother's marital status as a proxy for her daughter's ex-ante preference towards marriage. Using 1980 and 2008 U.S. Census data, I estimate the impact of women's preference towards marriage and their educational attainments on their probability of getting married, and with Heckman correction, the impact on their husbands' earnings conditional on being married.