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Marital Sorting, Inequality and the Role of Female Labour Supply: Evidence from East and West Germany
Author(s) -
Pestel Nico
Publication year - 2017
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/ecca.12189
Subject(s) - microdata (statistics) , economics , earnings , german , counterfactual thinking , inequality , labour economics , sorting , labour supply , demographic economics , margin (machine learning) , geography , demography , psychology , sociology , population , social psychology , mathematical analysis , mathematics , archaeology , machine learning , computer science , census , programming language , accounting
This paper examines the effect of marital sorting on earnings inequality, taking into account extensive and intensive margin labour supply choices. Using German microdata, the observed distribution of couples’ earnings is compared to a counterfactual of random matches. In West Germany, marital sorting is found to be disequalizing only after adjusting for labour supply. This means that positive sorting in earnings potential is veiled by low female participation rates. In East Germany, the impact is highly disequalizing even when earnings are taken as given, due to the fact that East German women are more attached to the labour market.

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