The Male Marital Wage Premium: Sorting Versus Differential Pay
The authors examine whether male marital and parenthood premia arise due to differential pay by employers or from differential sorting of employees on occupations and establishments. They investigate these premia using matched employee-employer data from the period 1979–96 in Norway, a country with increased pressures on men to be more active in the family sphere and in which public policy has aimed at remaking the family institution. They find that the effect of marriage, and to a lesser extent of children, occurs mostly through sorting on occupations and occupation-establishment units. The role of differential pay from employers is marginal in explaining the marital and parenthood premia. Results assessing within-individual changes in wages suggest that about 80% of the marital premium is due to selection. The men who eventually marry and/or have children sort into the higher-paying occupations and occupation-establishment units even prior to marriage and parenthood.