Up to the 1970s, union formation was commonly not considered a relevant topic in economic research. Marriage was the only considered form of partnership and cohabitation was at most seen as pre-stage of it. This has changed drastically, with unmarried partnerships (cohabitation) becoming more and more attractive since it means fewer hurdles in case of separation and more independence and individualism for both partners. In addition to these personal impacts, changes in union formation also have immense economical consequences. This dissertation aims to provide evidence for the necessity to differentiate couples into legally married couples and cohabiting couples without legal binding. The investigation provides proof of why this rather underestimated socioeconomic aspect needs to be more focused on in economic research. Analyzing couples assortative mating behavior and labor supply outcomes convey contributions and important policy implications in the field of labor market economics. This doctoral thesis consists of three self-contained papers, which can be read independently. Chapter 2, 'Assortative Mating of Married and Cohabiting Couples' focuses on the assortative mating behavior of married and cohabiting couples over time and the consequences for income inequality. Goals are to evaluate whether mating occurs based on similar or dissimilar characteristics and to provide insights in the differences between cohabiting and married couples. Economically, this is important to better understand differences in the work behavior between married and cohabiting couples and it stresses the potential consequences on income inequality. Evaluating the correlation of mating behavior among married and cohabiting couples and income inequality is the second major aim of this study. Using data from the German Socio-Economic Panel (SOEP) study from 1984 through 2013, I find distinct differences in the mating behavior of married and cohabiting couples and also changes over time. Cohabiting couples choose their mate according to similar market traits. This in turn correlates with a higher intra-household income equality but also with a higher inter-household income inequality, compared to married couples. These findings are robust to different inequality measures and are validated by counterfactuals (random mating). Chapter 3 'The Added Worker Effect Differentiated by Gender and Partnership Status' examines the added worker effect (AWE), which refers to the increase of labor supply of individuals in response to a sudden financial shock in family income, that is, unemployment of their partner. While previous empirical studies focus on the responsiveness of married women, I explicitly analyze the spillover effects of unemployment on women and men and I also differentiate according to their partnership status (marriage vs. cohabitation). The aim is to evaluate whether intra-household adaptation mechanisms differ by gender and by partnership status. The underlying method is a difference-in-differences setting in combination with an entropy balancing matching procedure. The paper considers plant closures and employer terminations as exogenous forms of unemployment. Using longitudinal data from the German Socio-Economic Panel (SOEP) study from 1991 through 2013, the empirical investigation finds evidence of the existence of an AWE. The effect is largest when a woman enters unemployment and is mainly driven by changes on the intensive margin (increase of hours). Chapter 4 'The Impact of Cohabiting and Married Partner's Earnings on Work Hours' investigates the determinants of women's labor supply in the household context. The main focus is on the effect of a change in male partner's wages on women's work hours. This is linked to the broader question of whether married and cohabiting women make different economic decisions and respond differently to changes in their partners' wages. To provide a complete picture of working behavior within households, I analyze both women and men. The main estimation results suggest that married women work less on the labor market and further, an increase in partner's wages results in a negative and significant effect on married women's work hours. The marital status of men, on the other hand, has no significant impact on their work hours. In addition, this study suggests that the "income-splitting" tax benefit for married couples is a potential explanation mechanism for the proven differences between marriage and cohabitation.
|School:||Technische Universitaet Berlin (Germany)|
|Source:||DAI-C 81/1(E), Dissertation Abstracts International|
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