Search

We present an equilibrium model with inter-linked frictional labour and marriage markets. Women’s flow value of being single is treated as given, and it captures returns from employment. Single unemployed men conduct a so-called constrained sequential job search, and can choose to improve their labour market returns as well as their marriage prospects by under-taking a costly ex-ante investment in schooling. We establish the existence of market equilibria where a fraction of men get educated, and show that this fraction decreases if women’s labour market returns increase. We also examine the robustness of such equilibria.

We consider a version of the Stigler model of fixed sample price search, where consumer utility depends on whether or not at least one sampled price fulfils a pre-set target.

We present an equilibrium model with inter-linked labour and marriage markets, and argue that search frictions play an important role in explaining the male marriage premium. If men are viewed as bread-winners within households, this expectation a¤ects their job search behaviour, which in turn can lead to marital wage gaps ranked across productivities. Male heterogeneity is neither necessary nor sufficient for this premium. Nonetheless, when coupled with female heterogeneity in the marriage market, male reservation wages linked to productivities do affect the resulting assortative matching structure, and equilibrium marriage classes exhibit their own patterns of marital wage differentials. Using UK data on wages, male/female heterogeneity and marital classes, we also carry out the first empirical test of the role of search frictions in generating the male marriage premium.

We propose a theoretical explanation for the so-called “beauty premium”. Our explanation is based entirely on search frictions and the fact that physical appearance plays an important role in attracting a marriage partner. We analyse the interaction between frictional labour and marriage markets and establish the existence of a search equilibrium characterised by male wage differentials. The equilibrium may also display the “marriage premium”, predicted to be lower among attractive men. The link between beauty premium and marriage premium provides a falsification test of the model. We carry out the empirical analysis and conclude that we cannot refute the theory.