Events at CERGE-EI
Monday, 30 October, 2023 | 14:00 | Applied Micro Research Seminar
Anna Naszódi (Central Bank of Hungary) "A new method for identifying what Cupid's invisible hand is doing. Is it spreading color blindness while turning us more "picky'' about spousal education?"
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Authors: Anna Naszódi, Francisco Mendonca
Abstract: We develop a method suitable for detecting whether racial homophily is on the rise and also whether the economic divide (i.e., the gap between individuals with different education levels and thereby with different abilities to generate income) is growing in a society. We identify these changes with the changing aggregate marital preferences over the partners’ race and education level through their effects on the share of inter-racial couples and the share of educationally homogamous couples. These shares are shaped not only by preferences, but also by the distributions of marriageable men and women by traits. The method proposed is designed to control for changes in the trait distributions from one generation to another. By applying the method, we find the economic divide in the US to display a U-curve pattern between 1960 and 2010 followed by its slightly negative trend between 2010 and 2015. The identified trend of racial homophily suggests that the American society has become more and more permissive towards racial intermarriages since 1970. Finally, we refute the aggregate version of the status-cast exchange hypothesis based on the joint dynamics of the economic divide and the racial homophily.
JEL Classification: J12, C02
Keywords: Assortative Mating, Counterfactual Decomposition, Educational Homogamy, Racial Endogamy, Status-Cast Exchange Hypothesis
