The Paths to Marriage: Cohabitation and Marital Wealth Accumulation
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Date
2008-04
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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