The Paths to Marriage: Cohabitation and Marital Wealth Accumulation

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Date

2008-04

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Research Projects

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Abstract

Although wealth inequality has stagnated in recent years, considerable financial disparities remain. Researchers have begun to examine important processes that influence wealth accumulation, but relatively little research has focused on events in the adult life cycle. The existing research in this area has shown that marriage increases wealth accumulation. Yet, due to the growing prevalence of cohabitation, we ask whether all marriages share this relationship. We argue that cohabitation prior to marriage affects adult wealth accumulation differently compared to households that did not cohabit prior to marriage. Although selection forces differentially sort individuals into cohabitation, we argue that the process of cohabitation reinforces individualist attitudes and financial behaviors that reduce wealth accumulation. In turn, individuals who cohabited carry these behaviors and attitudes into their marriages, net of selectivity. We draw our sample from the National Longitudinal Survey of Youth 1979 and use linear growth curve models to examine household wealth trajectories across time. Importantly, we use educational attainment to empirically account for selection into cohabitation. We expect to find that though marriage is a wealth building institution, each additional year of cohabitation prior to marriage will reduce marital wealth accumulation across all educational categories compared to those who marry without prior cohabitation.

Description

Social and Behavioral Sciences; Social Work; Law: 3rd Place (The Ohio State University Edward F. Hayes Graduate Research Forum)

Keywords

cohabitation, wealth

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