Are There Increasing Returns in Marriage Markets?

Most matching models of the marriage market assume increasing returns to scale, that is, they postulate that a larger pool of eligibles will lead to a higher marriage rate. Empirically, the difficulty in studying the cross-section relationship between the size of the marriage market and marriage behavior is that, in general, market size is endogenous. We address this issue in two ways. First, we estimate the degree of returns to scale in U.S. marriage markets using the 2000 census.Given that in the United States people move to cities to find marriage partners and, therefore, the size of the marriage market is endogenous, we instrument the current size of a cohort in the marriage market with the size of that cohort twenty years earlier. Second, we estimate city scale effects in two societies–early Renaissance Tuscany and pre-reform China– where there was little internal mobility, and thus, the size of the marriage market can be considered exogenous. The main finding is that in all three societies, there is no evidence of increasing returns to scale in marriage markets, whereas the hypothesis of constant returns to scale cannot be rejected. This is true when looking at marriage odds ratios, total gains to marriage, and the quality of marital match. Given the different characteristics of the three societies in terms of population size, time period, economic structure, and social norms characterizing marriage markets, the similarity and precision of the estimates for returns to scale parameters is remarkable. JEL Classification: J12, J41