Job Stability, Earnings, Marital Stability: How Are They Related?

This study examines the interplay between job stability, earnings, and marital instability. We analyze the sequence of jobs, marriages, divorces, and remarriages among young men and ask: 1) Do job stability, high wages, and the career advancement of young men promote marriage and marital stability? 2) What are the consequences of marriage and marital stability for achieving high levels of job stability and occupational success? We develop a Dynamic Selection Control model in which young men make sequential choices about work and family, and estimate the model using a dynamic maximum likelihood (ML) approach that takes account of self-selection, simultaneity and heterogeneity. The data come from the 1979-1994 National Longitudinal Survey of Youth (NLSY79). We find job change and job stability are associated with lower wages and that both reduce the likelihood of getting married and remaining married. While taking account of labor market impacts on job stability and wages, we find robust evidence running from marriage to higher job stability and higher earnings. The evidence of a marriage premium on wages is robust. The authors thank the National Institute for Child Health and Human Development for financial support for this research.