College-educated workers entering the labor market in 1940 experienced a 4-fold increase in their labor earnings between the ages of 25 and 55; in contrast, the increase was 2.6-fold for those entering the market in 1980. For workers without a college education these figures are 3.6-fold and 1.5-fold, respectively. Why are earnings profiles flatter for recent cohorts? We build a parsimonious model of schooling and human capital accumulation on the job and calibrate it to earnings statistics of workers from the 1940 cohort. The model accounts for 99 percent of the flattening of earnings profiles for workers with a college education between the 1940 and the 1980 cohorts (52 percent for workers without a college education). The flattening in our model results from a single exogenous factor: the increasing price of skills. The higher skill price induces (i) higher college enrollment for recent cohorts and thus a change in the educational composition of workers and (ii) higher human capital at the start of work life for college-educated workers in the recent cohorts, which implies lower earnings growth over the life cycle.
Life-cycle earnings, flattening, skill price, education composition.
Why did the marriage probability of single females in France after World War 1 rise above its pre-war average, despite a 33% drop in the male/female singles ratio? We conjecture that war-time disruption of the marriage market generated an abnormal abundance of men with relatively high marriage propensities. Our model of matching over the lifecycle, when calibrated to pre-war data and two war-time shocks, succeeds in matching the French time path under the additional assumption of a pro-natalist post-war preference shock. We conclude that endogeneity issues make the sex ratio a potentially unreliable indicator of female marriage prospects.
Family Economics, Household Formation, Marriage, Fertility.
Powerful currents have reshaped the structure of families over the last century. There has been (i) a dramatic drop in fertility and greater parental investment in children; (ii) a rise in married female labor-force participation; (iii) a decline in marriage and a rise in divorce; (iv) a higher degree of assortative mating; (v) more children living with a single mother; (vi) shifts in social norms governing premarital sex and married women's roles in the labor market. Macroeconomic models explaining these aggregate trends are surveyed. The relentless flow of technological progress and its role in shaping family life are stressed.
Assortative mating, family economics, female labor supply, fertility, household income inequality, household production, human capital, macroeconomics, marriage and divorce, quality-quantity tradeoff, premarital sex, single mothers, social change, survey, technological progress, women's rights.