Why Are Power Couples Increasingly Concentrated in Large Metropolitan Areas?

*We would like to thank three anonymous referees, Emek Basker, Scott Drewianka and Courtney Lafountain for their helpful comments and suggestions and Michael Orlando for programming assistance. Pollak thanks the John D. and Catherine T. MacArthur Foundation for their support. The usual disclaimer applies. ABSTRACT Using census data, Costa and Kahn (QJE, 2000) find that power couples-couples in which both spouses have college degrees-are increasingly likely to be located in the largest metropolitan areas. Costa and Kahn suggest that college educated couples are more likely to face a co-location problem-the desire to satisfy the career aspirations of both spouses-and therefore are more attracted to large labor markets than are other couples. An alternative explanation is that all college educated individuals, married and unmarried, are attracted to the amenities and high returns to education found in large cities and, hence, the formation of power couples through marriage of educated singles and additional education is more likely to occur in larger than smaller metropolitan areas. Using the Panel Study of Income Dynamics (PSID), we test the hypothesis that power couples are more likely to migrate to the largest cities than part-power couples or power singles, but find no support for this hypothesis. Instead, regression analysis suggests that only the education of the husband and not the joint education profile of the couple affects the propensity to migrate to large metropolitan areas. The observed location trends are better explained by higher rates of power couple formation in larger metropolitan areas. 3 1. Introduction Couples in which both husband and wife have college degrees are increasingly likely to be located in large metropolitan areas. In 1970, 39% of these couples – called " power couples " by Costa and Kahn (2000)-lived in metropolitan areas of at least two million. In 1990, this number had jumped to 50%. By comparison, among couples in which only one spouse has a college education-" part-power couples "-the proportion living in large metropolitan areas increased more slowly, growing from 36% to 42% over the two decades. Couples in which neither spouse has a college degree-" low-power couples "-have the lowest probability of living in a large city and the lowest rate of increase, growing from 30% to 34% in twenty years. (Costa and Kahn, 2000) Costa and Kahn consider two main explanations for the increasing concentration of power couples in large metropolitan statistical areas (MSAs). First, large metropolitan areas …