The Economics of Marriage

Although the best fairy tales often end with a pauper marrying a prince, in real life such Cinderella stories are few and far between. A new study by Kerwin Charles and his colleagues Erik Hurst and Liqian Ren shows that only 7% of the very poor, or the very rich, marry into the opposite end of the income range.

The idea that people tend to marry others of like education or income has been widely documented, but Charles, new associate professor at the Harris School, adds a new dimension to the story.

Children, he finds, inherit their parents’ economic status not only through what their parents’ money can (or can’t) buy or influence (such as a good education or access to social networks), but apparently also through a more indirect route: by influencing their children’s choice in future in-laws. It turns out that young adult children tend to marry partners whose parents mirror their own parents’ economic status.

It has been known that young adults with, say, a master’s degree tend to marry others with a master’s degree. Those educations then tend to translate to higher incomes. Sorting yourself into a marriage pool by individual traits is pretty common, but what is less well known, according to Charles, is that young adults also sort themselves on the traits of their parents (in this case, economic status). That they are marrying mates who are equally educated and that their in-laws belong to the same country club, so to speak, suggests just how dynasties are born.

“When the child of wealthy parents marries another equally wealthy child,” Charles notes, “the resulting couple is much wealthier.”

Of course, the same applies on the other end of the spectrum. Children from poor families also tend to have equally poor in-laws.

“Marriage has been largely overlooked in social policy research,” he says, “but it’s actually a very strong determinant of one’s economic position.”

The results, he says, have broad social implications. The American dream is all about being able to move up the socio-economic ladder despite the conditions of one’s birth. This new study shows, however, that young people in America typically sort themselves by parental income even without coercion.

The reason for this self-sorting by wealth is unclear. One reason could be that parental wealth determines preferences, so that the traits one finds attractive in others are the traits one grew up with. Preference, on the other hand, may have nothing to do with the decision. Instead, wealth may simply limit the set of people one meets, and thus might marry.

“The reality is,” he says, “that for many decades, policies have targeted the individual characteristics of people—such as their level of education. Our paper is part of a growing body of research suggesting that this approach might be inadequate because the handicaps and advantages we inherit from our parents do not necessarily show up in individual ‘traits’ like schooling or income.” So programs designed to help people climb the ladder could be sabotaged by influential and hidden factors. “In effect, by ignoring family history and all that it confers—including advantages in marriage—these policies systematically mis-measure citizens’ true economic and social positions.” All of which could mean that— ultimately—where you come from could matter a lot more than we’d like to think.

Barbara Ray