THE MALE MARRIAGE WAGE PREMIUM IN BRAZIL Janana Teodoro Guiginski 1 - PDF document

THE “ MALE MARRIAGE WAGE PREMIUM ” IN BRAZIL Janaína Teodoro Guiginski 1 Simone Wajnman 2 INTRODUCTION The aim of this paper is to explore earnings differentials of Brazilian men in different marital status who share similar personal and employment characteristics. Literature about the subject unanimously points out the existence of what is known as „ male marriage wage premium ‟ , which means that, when men with similar individual and professional characteristics who differ only in marital status are compared, married men have higher earnings than their single counterparts (Adler and Oner, 2013, Ahituv and Lerman, 2007, Hersch and Stratton, 2000, Killewald and Gough, 2013). Several theories and hypotheses, based on different arguments and methods of analysis have been tested, but there is no consensus on the results, suggesting that the determinants behind male marriage wage premium may be multiple and interrelated. Three hypotheses are commonly put forward to explain why married men have higher earnings than single men: productivity, selectivity, and discrimination. According to hypotheses associated with productivity, specialization provided by marriage allows men to invest more in human capital, which in turn increases productivity and, consequently, wages (Becker, 1991). Hersch and Stratton (2000) included time spent on housework in the wage equation to test whether household specialization may explain the marriage premium for men. Results show that housework has a negative impact on male wages, but does not affect the magnitude of the marriage premium. The authors concluded that marriage seems to make men more productive, but not due to specialization, and suggest alternative explanations such as preferential treatment from employers or changes in behavior derived from marriage or from the decision to get married. 1 Doctoral candidate in the Graduate Program in Demography at CEDEPLAR / UFMG and scholarship recipient of CNPq-Brasil. 2 Full Professor in the Demography Department at CEDEPLAR / UFMG.

According to selectivity theories, highly productive men, with higher earning potential, are more likely to be married. According to this hypothesis, observable characteristics (such as background, educational attainment, physical appearance, responsibility, etc.) increase the chances of success in the labor market and also in the marriage market (Chiodo and Owyang, 2002). Ahituv and Lerman (2007) show that marital status, work effort, and wage rates are interrelated. Work hours and earnings are influenced by marital status, but the opposite is also observed: success in the labor market increases the likelihood of marriage and remarriage and reduces the likelihood of divorce (Ahituv and Lerman, 28, 2007). The discrimination hypothesis establishes that employers favor married men because they perceive marriage as a sign of greater stability, responsibility, or maturity. Adler and Oner (2013) found higher premium for men who work in more routinized occupations rather than in more creative ones and claim that this result is explained by the discrimination hypothesis. From a stereotyped point of view, service sector and working-class employees would benefit from employers‟ biased perceptions. On the other hand, men in creative occupations would be less adhered to traditional value systems which reward marriage (Adler and Oner, pp. 17-18, 2013). Other hypotheses to explain male marriage wage premium are based on changes in behavior after marriage and also on the role of the wife. Killewald and Gough (2013) suggest that part of the marriage wage premium is a result of changes in work hours, changes in job traits, and tenure. They claim that marriage possibly encourages tenure in employment, more effort to paid labor, changes for better positions, and changes in preferences for financial resources. Moreover, that marriage can provide benefits which affect wages, such as better health conditions and access to spouse‟s human capital. Ashwin and Isupova (2014) emphasize the importance of the breadwinning role for masculine identity and the direct pressure exerted by wives for men to increase their income. In addition, they emphasize that wives influence husbands' potential earnings through monitoring and mentoring, stimulating a “ responsible version ” of masculinity. They highlight that the wife acts as a co-producer of masculinity within marriage, with direct effects on perspectives and performance for work, positively reflecting on wages. Although recurrent in international literature, this subject remained poorly explored for the case of Brazil. Therefore, for this work, data from the 2010 Brazilian Demographic Census, made available by the IPUMS-I project will be used to examine male marriage premium. Since cohabitation in Brazil is a very common form of union, with same legal status and rights as civil union, we examine whether there are differences between marriage and cohabitation premiums. In addition, based on the hypotheses discussed in the following section, we analyze whether wife/partner traits influence earnings of their respective spouses. Firstly, through quantile regressions, we verify the existence of differences in marriage and cohabitation premiums

across earnings distribution. Secondly, we examine the effect of wife or partner‟s educational attainment and her work hours on male earnings. This work analyzes workers at two different status in employment - formal employee in the private sector and self-employed - in order to verify the employer discrimination hypothesis. If the highest marriage premium is observed for employees rather than for self-employed men, it is possible that employers' preferential treatment of married men plays a significant role. Employer discrimination may also be a plausible hypothesis if the penalty associated with a working wife were greater for employees than for the self-employed. In addition to employer discrimination, other factors can also contribute to explain the negative association between wife/partner‟s work and male earnings, such as household specialization, assortative mating, and income effect. WI VES’ EDUCATIONAL ATTAINMENT AND LABOR SUPPLY In addition to marriage premium, researchers also show possible premiums and penalties associated with productive characteristics of the wives of married men. Spouses ‟ educational and work traits may influence (or be influenced by) male earnings in a number of ways, such as through specialization, discrimination, income effect, joint human capital, or may be an effect of the process of marriage formation (Birch and Miller, 2006, Blackaby et al 2007, Jacobsen and Rayack 1996, Mamun, 2012, Song, 2007, Verbakel and de Graaf, 2009, Zavodny, 2008). The positive assortative mating, which is generally observed, is a tendency for individuals with similar educational levels and productive potential to marry each other. If men with higher wage are more likely to marry highly educated women, we can observe a wage premium for the married man associated with his spouse‟s educational attainment. Thus, this premium would be explained by the process of marriage formation (Birch and Miller, 2006). The joint human capital hypothesis suggests that wife/partner‟s high educational attainment positively contributes to a man's stock of human capital, which increases his productivity and earnings (Birch and Miller, 2006; Mamun, 2012). Better educated women can contribute to their spouse s‟ work performance, through assistance with job tasks, social and professional relations, influencing decisions and investments in husbands‟ human capital, for example (Mamun, p.55, 2012). Men whose wives work usually earn lower wages than those men whose wives do not work (Jacobsen and Rayack, 1996). According to the employer discrimination hypothesis, men married to non-working women receive higher remuneration because they have greater geographical mobility or because employers favor these men for several reasons. Employer's