Latent earning capacity and the race marriage gap

Abstract

One of the most persistent socioeconomic phenomena in the process of family formation is the relatively low rate of marriage by black men and women. The enduring conventional wisdom has been that low black marriage rates reflect a relative shortage of marriageable black men. Yet numerous studies that have attempted to account for the shortage have reported that the race marriage gap remains, albeit sometimes in reduced magnitude, even after controlling for economic attributes of potential spouses and potential supplies of spouses in regional marriage markets. This paper examines the possibility that the race gap is explained in part by disparities in unobserved earning capacities between black and white men. In doing so, this study redefines the marriage market for each man in terms of his position in the earnings distribution rather than by geographic region. Our results indicate that when young black men are placed in competitive positions in the distribution of white residual earnings, the race gap disappears and even shows strong signs of greater marriage propensities in the black population.