Household Specialization, Millennials, and the Marriage Premium

It’s well established that marriage comes with a significant financial boost for men. According to W. Bradford Wilcox and Nicholas Wolfinger, studies show that married men earn, on average, “between 10 and 40 percent more than otherwise comparable single men.” The reasons behind the marriage premium, or whether marriage itself helps men earn higher wages, continues to be the focus of academic inquiry and debate, as Laurie DeRose recently reported. Despite increases in women’s labor force participation and in the share of female breadwinners in dual-income families, most of the research on the marriage premium has centered on the impact of marriage on men’s wages and has involved samples of Baby Boomers, not younger Americans.

A study published last year in the Journal of Marriage and Family, “Cohort Differences and the Marriage Premium: Emergence of Gender-Neutral Household Specialization Effects,” sheds new light on the subject by examining the impact of marriage on the wages of both men and women, and by being the first to examine the marriage premium among Millennials. The study's authors—University of Massachusetts Amherst sociology professor Michelle J. Budig and Misun Lim, a Ph.D. candidate—considered three central questions: Does the marriage wage premium 1) “persist among [M]illennials? 2) reflect changing selection into marriage across cohorts, and 3) differ by the gender division of spousal work hours?”

The Institute for Family Studies recently spoke with co-author Misun Lim about the study’s findings. The following interview has been edited for clarity.

IFS: Most of the research on the marriage premium has focused on how marriage affects the earnings of men. What's unique about your study?

Misun Lim: In our analysis, we compared within-person change in wages over time, comparing wages prior to and after marriage and controlling for human capital and other factors. On average, men earn higher wages when married than when unmarried. Among men, the marriage premium has been thought to partially derive from gendered household specialization, where men emphasize market work and women emphasize unpaid caring labor.

Our study is unique in three ways. First, we looked at the effect of marriage on wages for both men and women since there has been less attention on the association between marriage and women’s wages. Given the rise in married women’s and mothers’ employment patterns and changes in men’s preferences in marriage markets, we thought women might also experience a marriage premium. Second, since most studies are based on Baby Boom cohorts, we update findings by examining a Millennial cohort. Third, we find that the marriage wage premium/penalty varies among different household specialization types, especially among Millennials. We divided households into male-breadwinner, dual-earner, and female-breadwinner households. We found that Millennial women can achieve the marriage wage premium if they are in dual-earner or female-breadwinner households.

IFS: As you’ve noted, you examined the distribution of male-breadwinner, female-breadwinner, and dual-earner families in the Baby Boomer and Millennial cohorts. What are some of the key differences you found between the different generations in terms of women in the work force?

Misun Lim: Since the 1960s, the share of breadwinning mothers has increased in the United States. In 2011, mothers who are either the sole or primary source of income for the family are 40% of all households with children under the age of 18. The share of breadwinner mothers was just 11% in 1960, according to the Pew Research Center. With women’s wages becoming central to family economies, the traditional male breadwinner model became less common across these two cohorts. In our study, we found that Millennial women gained a marriage wage premium if they were breadwinners, while Baby Boom women did not receive marriage wage premium in any type of household specialization.

IFS: One big takeaway from the study is that the marriage premium is larger for the young adults in your study compared to Baby Boomers, despite increases in “egalitarian divisions of labor in the home and men’s increased participation in unpaid labor.” Tell us more about this finding—and to what do you attribute the fact that the marriage premium exists for Millennial couples?

Misun Lim: We found that for women and men, both marriage premiums and marriage penalties are larger in the Millennial cohort, depending on household specialization. For men in male-breadwinner households, and for women in female-breadwinner households, the marriage premiums are larger in the Millennial relative to the Baby Boom cohort. At the same time, for men in female-breadwinner households, and for women in male-breadwinner households, marriage premiums are larger among Millennials as well. This set of findings shows that household specialization matters more among Millennials relative to Baby Boomers, but that it is gender neutral. Women are advantaged in female-breadwinner households while men are advantaged in male-breadwinner households.

However, we also find that dual-earner households, where women and men equally engage in market work, are the highest-earning households and considerably more advantaged, in socioeconomic terms, among Millennials relative to Baby Boomers. In contrast, households that emphasize breadwinning for only one earner (female or male breadwinning) are lower income and more disadvantaged on socioeconomic indicators among the Millennial cohort, relative to Baby Boomers. These dual-earner households deliver a marriage premium for both women and men among Millennials, in contrast to Baby Boomers where only men earned a marriage premium for dual-earning households.

IFS: The study also shows that positive selection explained most of the marriage premium for Millennial women, but less so for men. Why is that?

Misun Lim: Much of the dual-earner premium can be explained by positive selection into marriage. Positive selection on factors that predict higher earnings increasingly also predict getting married among Millennial women, in contrast to Baby Boom women. Among Millennials, women’s earning potential is a more important predictor of marriage. Dual-earner households are more normative among Millennials, and women are more likely to be employed continuously after marriage and parenthood. Because women’s earning capacity is more important than in the past, men also prefer to marry women with higher earning potential. Marriage has become more selective for Millennial men than Baby Boom men, but the change is more dramatic for women in the recent cohort.

IFS: While female-breadwinner marriage has increased among Millennials, the study notes that this is not necessarily proof of greater gender equity (because of some of the differences you found between Millennial female breadwinners and other married women). What are some of the differences you found, and why are these differences concerning?

Misun Lim: We argue that despite the increase in the number of female-breadwinners among Millennials, they do not represent greater gender equality. First, among Millennials, female breadwinners have much poorer human capital than other married women. Notably, Millennial female breadwinners show lower education, job tenure, work experience, job stability, and hourly wage compared to women in dual-earner households or in male-breadwinner households. Rather than representing a rise in very successful female breadwinners, this type of household better mimics the disadvantages of low-income households and those headed by single mothers. Thus, female breadwinners are garnering marriage premiums from a position of economic disadvantage, which tempers the greater gender equity suggested by this finding parallel to male breadwinner’s premiums.

IFS: Both men and women in Millennial dual-earner households enjoyed marriage premiums, but men still enjoyed a larger premium. Why?

Misun Lim: Millennial men and women receive marriage premiums in dual-earner households, although Baby Boom women did not receive any marriage premium, regardless of household specialization type. Millennial women receive marriage premiums in both dual-earner and female-breadwinner households. Therefore, we argue that the gender-neutral household specialization model was strongly supported among the more recent cohort of workers.

Especially Millennial male breadwinners receive the largest marriage premium among three types of households (male-breadwinner, dual-earner, female breadwinner). Again, marriage has become more selective for Millennial men. Also, Millennial male breadwinners tend to be young, less educated, and more likely to be fathers. Their wives have more children and are more likely to work with irregular shifts. These findings support that men and women in male-breadwinner households practice the gender-traditional division of household labor, and men experience more benefits than their wives in this type of arrangement.