How Marriage Matters for the Intergenerational Mobility of Family Income: Heterogeneity by Gender, Life Course, and Birth Cohort

Abstract

Adult children’s labor market status and their type of marriage are major channels through which family advantages are passed from one generation to the next. However, these two routes are seldom studied together. We develop a theoretical approach to incorporate marriage entry and marital sorting into the intergenerational transmission of family income, accounting for differences between sons and daughters and considering education as a central explanatory factor. Using a novel decomposition method applied to data from the Panel Study of Income Dynamics, we find that marriage plays a major role in intergenerational transmission only among daughters and not until they reach their late-30s. This is more salient in the recent cohort in our data (people born 1963 to 1975). Marital status and marital sorting are comparably important in accounting for the role of marriage, but sorting becomes more important over cohorts. The increasing earnings returns to education over a husband’s career and the weakening association between parental income and daughter’s own earnings explain why marital sorting, and marriage overall, have been growing more important for intergenerational transmission from parents to their daughters.