The Causes of Wealth Inequality (30): Assortative Mating

comments 3
causes of income inequality / economics / equality

out-of-your-league

(source)

Intuitively, it seems obvious that assortative mating leads to higher wealth and income inequality. If rich people marry each other and poor people marry each other, then family incomes will be more unequal than when people routinely marry across class divides. Hence, recent increases in inequality may be due to higher rates of assortative mating, at least in the US:

Data from the United States Census Bureau suggests there has been a rise in assortative mating. Additionally, assortative mating affects household income inequality. In particular, if matching in 2005 between husbands and wives had been random, instead of the pattern observed in the data, then the Gini coefficient would have fallen from the observed 0.43 to 0.34, so that income inequality would be smaller. (source, source)

Now, obviously we should prefer a world in which wealthy men have the opportunity to marry high earning and educated women, because such a world is one in which women have more equal opportunities. It’s also a good thing that wealthy women continue working after marriage. In addition, we shouldn’t try to manage people’s marriages, no matter how strong we feel about income inequality. I guess that goes without saying. However, what we could do is modify the tax system so that wealthy individuals do not receive additional benefits when they marry. Or we could tax them more.

Before we do anything we should be realistic about the causal effects that we try to neutralize. There are many causes of inequality, and I think – but can’t prove – that assortative mating isn’t as important as is claimed in the quote above (the authors of the cited study compare the real world to a world in which mating is random, and such a world is inconceivable). A big part of rising inequality is due to the top 1% of the income scale. The people in that bracket probably also look for partners similar to themselves, but assortative mating can’t explain the enormous income gains that they have seen over the last decades:

BfGI-JDIUAA_ysH

(source)

More posts in this series are here.

3 Comments

  1. Pingback: interfluidity » “Marriage promotion” is a destructive cargo cult

  2. alexander says

    as i read it, the NBER paper in question is analysing growing wealth inequality across the population, and not as limited to a definition along the lines of ‘the top 1% – the botttom quintile’. so your point is a fair one, but a little abstract. in any case, if i am in, say, in any of those first 5 bars, my income is still rising, and that fact that there is a small % of the population enjoying runaway income increase isnt actually something which negatively affects me. which, ultimately, is an issue with the concept of ‘wealth inequality’ at all.

    • Ok, but the top 1% does affect the standard Gini measure. Whether that’s a problem or not, and whether we should have another measure less sensitive to top 1% explosions, is another matter. Top 1% inequality can affect the rest of the population, for example through political capture. So perhaps it’s good that a measure of inequality is sensitive to it.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s