I often end up disagreeing with Bryan Caplan at EconLog. However, his writings tend to be thought-provoking and I find that if I spend some time considering what he says, I will frequently end up changing my mind on something. His writings on marriage and income are no exception. Most recently, he wrote an interesting post advancing marriage as a highly attractive option for poor people who wish to improve their lives.
Now far be it from me to challenge the obvious economies of scales that one gets from marriage. Shared housing and transportation costs are huge savings, division of labor in household chores can greatly increase utility and we haven’t even talked about the fact that the married couple might enjoy each other’s company. Also, despite Bryan linking to the Wikipedia article on marriage penalty, most tax accountants will tell you that it is at least for now no more than a myth and that marriage substantially reduces your tax bill. But that is not the story Bryan wants to tell us. He actually focuses on the correlation in the NLSY data-set between marriage and income and argues that marriage causes a higher income.
I couldn’t find where he posited a mechanism whereby this causation would be effected, but there are a number of plausible explanations. Marriage could induce one to become more responsible, sociable, better at teamwork etc… Marriage most assuredly allows a division of labor which may raise productivity. Bryan advances for evidence a study looking at marriages which occur while a baby is on the way. What this study tries to do is separate marriages that are selected into from marriages which would be “accidentally” entered into after an unexpected pregnancy. If spouses and employers just happen to look for the same thing in a spouse and employee, getting married because of an unexpected pregnancy would not increase your income. On the other hand, if marriage makes you more productive, marriage due to an unexpected pregnancy should be just as effective in raising your income as marriage for other reason. The study finds some support for Bryan’s argument.
I, however, believe there is an intermediate model that explains the results of the study but rejects Bryan’s implied conclusion that more poor people should get married: signaling. Being in a relationship with somebody requires a certain skillset: ability to work with someone else, reliability, perseverance, etc… If you have those skills and qualities, you are much more likely to end up in a long-term committed relationship, get married and stay married. Those qualities as it turns out are also highly valued by employers and so they may end up using marriage as a signal for those qualities.
The shotgun marriage example is simply an example of someone mimicking the signal. They get the same advantages as people who sent out the signal legitimately. But if Bryan successfully convinces individuals to marry as a way to increase their income, the signal to noise ratio will drop until the signal has no value.
PS: To my lovely wife. I didn’t marry you to get a better job.