2008 Reports

Female Labor Market Conditions and Family Formation

Kondo, Ayako

Slack labor market conditions for women relative to men increase marriage rates for young women. One concern is that this increase may be from marginal marriages due to some females lowering their reservation match quality, and so lead to future divorces and possibly to increases in female headship and poverty. This paper examines the long-term consequences of such marriages using data from the Survey of Income and Program Participation and the Panel Study of Income Dynamics. I find that the marriages induced by relatively poor economic conditions for women reflect shifts in the timing of marriage among young women who would eventually marry anyway. Labor market conditions at age 18-20 do not affect the fraction of women who will marry by age 30. Further, labor market conditions at marriage are uncorrelated with the probability of divorce or with spouses' characteristics, and marrying young in response to labor market shocks does not significantly affect a woman's fertility or labor supply. These findings are consistent with a model in which economic conditions affect women's search intensity without affecting their reservation match quality.