On the Economics of Marriage.

The institution of marriage captures the attention of economists with increasing frequency these days, many finding common ground in the theory developed in Gary Becker's (1991) A Treatise on The Family. Although Grossbard-Shechtman was a student of Becker's and his influence is evident, her treatise stands apart on its own merit as a significant contribution to the economics of marriage literature. This book should attract the intelligent general reader as well as economists.

Unlike other recent work addressing the economics of marriage, Grossbard-Shechtman's central thesis rests on the interaction between traditional labor markets and the market for spousal labor. Spousal labor is defined as any activity benefitting the spouse, ranging from traditional household chores to investing in a spouse's human capital to increase household and career productivity. Applying microeconomic theory (and without bombarding the reader with mathematics), the author argues that labor market conditions affect the value of time in the household and consequently the supply and demand of spousal labor.

The book is organized in six parts. Parts I and II provide an overview of the economic theory of marriage and other explanations of marriage. The general reader will benefit from this overview while readers familiar with the economics of marriage can skim these chapters and turn to part III where the author analyzes the impact of the sex ratio on marriage. The sex ratio is defined as the number of marriageable men divided by the number of marriageable women. Trends in the sex ratio over the century are traced and cross-city comparisons of sex ratios are analyzed. "Marriage squeeze" occurs when members of one sex face a small pool of eligibles for marriage. A high sex ratio indicates a squeeze for men which, according to the author, leads to predictably fewer women in the labor force.

The author traces the women's liberation movement in the 1960s to a corresponding marriage squeeze for women. Concurrent upward trends in divorce and cohabitation appeared in the late 1960s and persisted into the late 1980s. The author also discusses racial variations in the incidence of marriage squeeze. Differences are explained by variations in sex ratios according to race and a generally weaker bargaining position for compensation in the spousal labor market since more black (than white) women work outside the household.

Part IV turns to an innovative analysis of compensating differentials in marriage and intermarriage. The author explains, for example, that a Jewish man who prefers a Jewish wife (homogamy) will intermarry when he cannot afford the level of compensation necessary to attract a Jewish wife. As anti-semitism has declined, however, Jewish men who prefer intermarriage (heterogamy) now face a lower level of compensation to secure a non-Jewish spouse. Further, the higher incidence of homogamy among Jews is indicative of a diminution in discrimination.

Alternatives to "traditional" marriage, including cohabitation, divorce, and polygamy are investigated in Part V of the book. In chapter 9 the author addresses cohabitation and marriage formality and derives a marriage opportunity curve and an indifference curve to indicate the level of risk and benefits-associated with a particular union. It is likely, according to Grossbard-Shechtman, that as a man's status increases, there are two potential impacts on marriage. First, as income rises there is an increasing risk of dissolution of a marriage along any given marriage opportunity curve so that higher status men may be less likely to marry. On the contrary, such men may demand higher quantities of spousal labor thereby increasing the likelihood of a formal marriage.

The institution of polygamy is explained by the author as a function of the income and education levels of a husband. The higher a man's (market) income, the greater his demand for spousal labor and hence the more likely polygamy will occur, barring any prohibitions. Women are more likely to demand monogamy as their level of education rises since higher levels of productivity and consequently higher market wages are anticipated for such women. The author claims that where sex ratios are less than one, the prohibition of polygamy is particularly harmful since the demand for spousal labor is already low. Therefore, the lower the sex ratio the more likely polygamy will occur, allowing a previously unmarried female to contribute to total household production in a marriage.

In the final part of the book, the author addresses investment in spousal productivity, the contribution of virtue to human capital, a case study among Israeli managers, and the function of religiosity as an investment in human capital. It is claimed herein that married individuals tend toward higher levels of productivity than their single counterparts due to spousal assistance with household tasks, investments in spousal human capital, and the representation of loyalty and commitment that transfers from the marriage to the firm. The author claims that married workers earn higher wages than single workers since the marital bond exudes the quality of virtue, which indicates a lower likelihood of shirking or quitting a job. As a result, firms tend to invest more in married individuals which increases the output of such employees. The author argues for promotion of general standards of virtue on the national level through regulation and education to increase the average level of productivity in society and increase economic growth.

While I doubt Grossbard-Shechtman's analysis will convince policymakers to legalize polygamy or promote virtue as the key to economic growth, the author does offer a well-organized, innovative approach to the interaction of market and spousal labor. The surfeit of hypotheses presented is the primary negative of the book. However, this original explanation of the economics of marriage overshadows any drawbacks and provides plenty for the reader to ponder.