The Marriages of Power Couples Reinforce Income Inequality
By TYLER COWEN DEC. 24, 2015
The notion of “making a good match,” a staple of the writings of Jane Austen and Henry James, continues in contemporary romance novels. At the same time, income inequality commands increasing attention from economists. Lately we’ve been learning just how much these two topics are tied together.
These days, an investment banker may marry another investment banker rather than a high school sweetheart, or a lawyer will marry another lawyer, or a prestigious client, rather than a secretary. Whether measured in terms of income or education, there are more so-called power couples today than in the past, one manifestation of a phenomenon known as assortative mating, or more generally the pairing of like with like.
These matches are great for those individuals who can build prosperous and happy family alliances, but they also propagate inequality across the generations. Of all the causes behind growing income inequality, in the longer run this development may prove one of the most significant and also one of the hardest to counter.
For instance, the achievement gap between children from rich and poor families is higher today than it was 25 years ago, according to a recent study from the Pew Research Center. Furthermore, higher income and educational inequality increase the incentive to seek out a good marriage match, so the process may become self-reinforcing.
Money and talent become clustered in high-powered, two-earner families determined to do everything possible to advance the interests of their children. There is some long-term benefit for society, since many innovators and business creators will receive their initial boosts early in their lives, including the very best training in childhood, and that may enhance their eventual productivity.
But there are also serious economic costs. As it becomes harder for many people to “marry up” as a path for income mobility for themselves or their children, families that are not well connected may feel disengaged, and the significant, family-based advantages for some children may discourage others from even trying.
The numbers show that assortative mating really matters. One studyindicated that if the marriage patterns of 1960 were imported into 2005, the Gini coefficient for the American economy — the standard measure of income inequality — would fall to 0.34 from 0.43, a considerable drop, given that the scale runs from zero to one. That result is from the economist Jeremy Greenwood, a professor of economics at the University of Pennsylvania, and other co-authors.
A study of Denmark by Gustaf Bruze, a researcher at the Karolinska Institute in Stockholm, showed that about half of the expected financial gain of attending college derived not from better job prospects but from the chance to meet and marry a higher-earning spouse.
There’s not much data on American assortative mating before early in the last century, but a recent paper by Robert D. Mare, a professor of sociology at the University of California, Los Angeles, showed that assortative mating was relatively more common in America’s Gilded Age, fell and reached a much lower level in the 1950s, and afterward started and continued to rise.
The G.I. Bill may have helped lower assortative mating, because it gave opportunities for upward mobility to economic classes that had not enjoyed it. In general, the greater the number of men entering the middle class, the more socioeconomic mixing will occur.
In 1950 it was also the case that marriage ages were especially young, meaning that couples often paired off from high school and may have had less of a sense how to match to each other by expected income or education. And most women had fewer chances to earn very much, so few if any men were searching hard to find future law partners or doctors.
Economics itself shows patterns of assortative mating. In 2007, an article in The New York Times cited 13 up-and-coming economists, most of whom have gone on to greater fame. The striking fact is that six of these individuals are married to each other, and that was not the premise of the article. Another person on the list, Justin Wolfers, is a partner with another prominent economist, Betsey Stevenson, with both working at the University of Michigan. (They have two children together but are not legally married; Professor Wolfers is a frequent contributor to The Times.) The children from these kinds of pairings probably have a head start when it comes to pursuing successful careers as research scientists or in other education-intensive endeavors.
Universal preschool, further experiments with charter schools, and higher subsidies or tax credits for children are among the policy innovations that might lift opportunities for children of lower earners. Even if those are good ideas, it is not clear how much they can overturn the advantage that comes from being a child of highly educated, highly motivated parents with lots of will and also money to spend on lessons, outings, travel and other investments in the future of their children.
Today, we rightfully reject the idea of eugenics as repugnant, yet we are conducting our own experiments in mating, without much careful thought as to where they will lead. Match.com, Facebook and Tinder all help us find “just the right mate,” according to our prior desires and specifications, with aid from computer algorithms. The real question may be not whether we can reverse some of the less desired effects of assortative mating, but rather just how far the practice will go.