Dollars and Sex (16 page)

A LESSON FROM UNTRADITIONAL MARRIAGE AND THOSE LESS LIKELY TO MARRY

Much of what I have said so far applies not only to heterosexual unions but also to same-sex unions. There is one way in which same-sex unions differ, however; people in same-sex relationships are not subject to the same gender wage gap as are people in heterosexual unions. This means that when
choosing how much, or how little, to invest in their careers, lesbians have no reason to expect to be married to a person who earns a higher income than themselves in the same way that heterosexual women might.

There is an interesting observation that lesbians are paid wages that are about 6 to 13 percent higher than the wages paid to heterosexual women. One particular study that seeks to understand this lesbian wage premium gives us some insight into how heterosexual women, who might reasonably plan on being married to men, invest in their careers.

According to the evidence, lesbians are, on average, better educated, more likely to be white, living predominantly in cities, having fewer children, and significantly more likely to be professionals than are other women. Even when researchers control for these differences (essentially comparing women who are in every way similar except in their sexual orientation), the lesbian wage premium persists.

One possible explanation goes back to this story of comparative advantage that we have been discussing—the one that says that because men have historically been paid more to work outside the home, women have been handed the comparative advantage in doing all the laundry.

The gap between women's and men's wages may have narrowed, but if a woman believes that she will eventually be married to a man who earns a higher income than herself, then she has less to gain from investing in skills that will give her an advantage on the labor market. This investment in what economists call “human capital” doesn't include just formal education—researchers can control for that using the data—it also includes a variety of skills that the market rewards with higher wages that we can't observe in the data: for example, the level of effort a woman is prepared to put forward to advance her own career.

Women who have no intention of ever marrying a man and look forward to a future with a female spouse do not have the same incentive to underinvest in their own human capital. They are just as likely to find themselves in a relationship with a woman who earns a higher income as they are with a woman who earns a lower income. With no expectation that
they will later benefit from having a comparative advantage in home production relative to a higher-income-earning husband, it makes sense that lesbian women will invest more in skills that give them an advantage on the labor market.

Nasser Daneshvary, Jeffrey Waddoups, and Bradley Wimmer cleverly test this theory in a paper that calculates the wage premium paid to lesbians in two distinct groups—those who were once in a heterosexual marriage and those who have never been married. The assumption made is reasonable: lesbian women who were once married to men (about 44 percent of lesbian women in the sample) have (presumably) in the past had the expectation that they would have a marriage partner with a higher income. The never-married women might also have had this expectation, but it is much more likely that, on average, women in that group expected to be in a relationship with another woman.

Does the evidence support the theory that the lesbian wage premium can be explained by greater investment in more market-oriented skills by lesbian women? Well, controlling for whether or not a woman was ever in a heterosexual marriage does reduce the lesbian wage premium by about 17 percent, thus providing some evidence to support the theory. At 5.2 percent though, the once-married lesbian premium is still high. Why it exists continues to be a mystery to researchers.

There is further evidence that women who expect to eventually be married tend to underinvest in their careers. This time the evidence comes from a group of women who might reasonably expect, if they have looked at the data, that they will never marry—women who are obese.

Health economist Heather Brown observes that single women who are obese earn higher wages than similar women with a lower body mass index (BMI). This result is a bit puzzling given that, as a group that includes both married and single women, obese women generally face a wage penalty for carrying more body weight.

After controlling for all other attributes that contribute to the wages earned (occupation, health, education, age, number of children, etc.),
Brown finds that married men and single women both have a wage rate that is positively related to their BMI—the heavier they are, the higher the wage they are paid.

Among single men and married women, their wage rate and BMI are negatively related; the heavier those men and women are, the lower the wage they are paid.

Brown's argument for why married men are paid more when they are heavier is that being overweight does not disadvantage men in the marriage market in the same way that it disadvantages women (i.e., preventing them from finding a spouse), but it does encourage them to invest more into their careers in order to compensate their wives for their lack of physical fitness.

A paper that uses data from the United States and nine European countries by Pierre-André Chiappori, Sonia Oreffice, and Climent Quintana-Domeque illustrates this point using the trade-offs that we discussed in
chapter 3
. They find that an average man can compensate his wife for an additional 22 lbs/10 kg of body weight by earning 1 percent more than the average wage. They find that overweight women, however, are seriously disadvantaged on the marriage market. Not only are they less likely to marry, but when they do marry, they are much more likely to be married to low-income-earning men. For every unit a married woman's BMI increases, the lower is the earned income of the man to whom she is married.

According to Heather Brown, single women who are heavy recognize that they are less likely to marry, and if they do, they are likely to be married to men who have lower incomes, and so they invest more in their human capital in order to bring their standard of living closer to the point it might have been had they married.

It is also possible that they invest more in their jobs in an attempt to compensate a potential future spouse for being married to a woman who has a high body weight. There is some evidence they can do that, although not nearly as effectively as men can.

It seems that women who believe they will one day be married to a person with greater earning potential than themselves are underinvesting in their careers as a result of this expectation. Thus, understanding the economics behind the way in which married couples organize production of household goods and services helps explain not only how people choose their partners but also (in part) why the wage gap between men and women persists despite incredible gains by women in the workforce. It is easy to believe that the gender wage gap is entirely the product of discriminatory employers, but it appears that the expectations for marriage of some women is leading to lower workforce productivity and lower wages for women on average.

TIME SPENT IN JAIL IS REDUCING MARRIAGE RATES

According to the Pew Research Center, 62 percent of black women (between the ages of 30 and 44) in 1970 were married, compared with only 33 percent in 2007. The marriage rate has also fallen for black men; in 1970, 74 percent were married, compared with 44 percent in 2007.

Just like other educated women, black women searching for an educated spouse are hard-pressed to find one; 57 percent of black women attend college, compared with only 48 percent of black men. Given that, it is not that surprising that black men with a college degree are far more likely to be married than are black men who did not complete high school: 55 percent of college graduates are married, compared with 27 percent of those with less than a high school education.

This difference in education levels cannot completely explain why the marriage rates for black women are so low. One alternative explanation that has been explored by researchers is that marriage rates are falling because black men are incarcerated at much higher rates than are black women, or anyone else for that matter. If black women have a strong preference to marry black men—and, in fact, 96 percent of married black women are with black men—then high rates of incarceration are disadvantaging black women on the marriage market. This is true not just because black men are absent from their community while incarcerated, but also because a man with a criminal record has a much harder time earning a high-enough income to support a family later in his life.

The “Just Say No” campaign in the late 1980s increased the severity of sentencing for drug offenders in the United States. Since that time, and particularly since the mid-1990s, incarceration rates have been steadily increasing to the point that the United States now has one of the highest incarceration rates in the world. This is not just because there are more convictions, but also because longer sentences are increasing the number of people who are in prison at any one point in time.

Incarceration rates vary greatly by both socioeconomic class and race; in 2004, 12.5 percent of all black males age 25 to 29 were incarcerated compared with only 3.5 percent of all Hispanic males and 1.7 percent of all white males of the same age. If women search for a future husband within their community, then some women are more disadvantaged on the marriage market than others when the men in their community are incarcerated at high rates.