Abstract
Does geographic heterogeneity in occupational returns affect the patterns of family formation and dissolution? And do marriage choices matter for the geographic distribution of workers? This paper examines the effects of geographic heterogeneity in occupational returns on marriage and divorce, and the impact of family formation on the geographic allocation of labor. We document that geographically mismatched workers – those living in a location that pays relatively lower wages in their occupation – are less likely to marry and more likely to divorce. Moreover, conditional on marrying, mismatched workers are more likely to be married to similarly mismatched partners. To account for these observations, we develop an equilibrium model of migration and family formation, and we estimate it using microdata for the US. Through counterfactual experiments, we assess both individual and aggregate implications of joint marriage and location choices. We find that, while at the individual level entering a marriage reduces wage growth, in aggregate the presence of marriage markets and the endogeneity of marriage market conditions enhance productivity by attracting workers to high return locations.
Local Organizers: Vincenzo Scrutinio, Annalisa Loviglio