THE FALL IN MENS RETURN TO MARRIAGE - DECLINING PRODUCTIVITY EFFECTS OR CHANGING SELECTION

Historically, one of the most robust findings from human capital wage equations has been that married men earn more than men who never marry . However, the earnings premium paid to married compared with never-ma rried men declined by more than 40 percent during the 1980s. Data from the National Longitudinal Surveys (young men and youth cohorts) are u sed to explore two competing explanations for this decline: changes in the selection of high-wage men into marriage and changes in the produ ctivity effects of marriage due to declining specialization within hou seholds. The results suggest that the drop in the marriage wage premiu m was due largely to a decline in the productivity effects associated with marriage. Instrumental variables estimation suggests that these d eclining productivity effects can be explained by a reduction in the a verage degree of specialization across households coupled with an incr ease in the wage penalty associated with wives' labor market hours.