The Aggregate Implications of Gender and Marriage

TitleThe Aggregate Implications of Gender and Marriage
Publication TypeReport
Year of Publication2016
AuthorsBorella, M, De Nardi, M, Yang, F
Series TitleNBER Working Paper Series
Document NumberWorking Paper No. 22817
Pagination1-54
Date Published11/2016
InstitutionNational Bureau of Economic Research
CityCambridge, MA
KeywordsGender Differences, Marriage, Older Adults, Retirement Planning and Satisfaction, Women and Minorities
Abstract

Wages and life expectancy, as well as labor market outcomes, savings, and consumption, differ by gender and marital status. In this paper we compare the aggregate implications of two dynamic structural models. The first model is a standard, quantitative, life-cycle economy, in which people are only heterogenous by age and realized earnings shocks, and is calibrated using data on men, as typically done. The second model is one in which people are also heterogeneous by gender, marital status, wages, and life expectancy, and is calibrated using data for married and single men and women. We show that the standard life-cycle economy misses important aspects of aggregate savings, labor supply, earnings, and consumption. In contrast, the model with richer heterogeneity by gender, marital status, wage, and life expectancy matches the observed data well. We also show that the effects of changing life expectancy and the gender wage gap depend on marital status and gender, and that it is essential to not only model couples, but also the labor supply response of both men and women in a couple.

URLhttp://www.nber.org/papers/w22817.pdf
DOI10.3386/w22817
Citation Key8838