Why opposites shouldn’t attract
Those of you out courting next Friday, do enjoy yourselves – but with a twinge of guilt. Inequality has been rising for a generation in many places, especially the Anglophone countries. Let’s be honest: you and your romantic pursuits are part of the problem.
The issue here is something economists call “positive assortative mating”, a charming phrase that we blame on the evolutionary biologists. It describes the process of similar people pairing off with each other: beautiful people dating beautiful people, smokers dating smokers, nerds dating nerds. All perfectly natural, you might think.
While it may be natural and familiar, assortative mating also breeds inequality. Economists often look at sorting by education level, which is common and easy to measure. If the MBAs and PhDs were sprinkled randomly throughout the population that would spread the wealth around. But, of course, they tend to pair up with other MBAs and PhDs; meanwhile the high-school dropouts tend to end up with other high-school dropouts. Already prosperous people are made more prosperous yet by their marriages.
This is an interesting idea in theory but does it have any practical significance? A recent paper by Jeremy Greenwood and others looks at a large data set from the US Census Bureau through the lens of the Gini coefficient, which is a measure of inequality. It’s 63 in highly unequal South Africa, 40 in the UK and 23 in egalitarian Sweden. It’s 43 in the US Census data set; but if the couples in the data set were randomly paired off, the Gini coefficient would be a mere 34. Assortative mating increases inequality.
But does this pairing-off process matter more than it used to? Does it explain any part of the rise in inequality we’ve seen since the 1970s? The answer, again, is yes – but a guarded yes. Marriage patterns have little or nothing to do with the concentration of earning power in the hands of the richest 1 per cent and 0.1 per cent: women are major breadwinners in the top quarter of the distribution but less so right at the very top – not yet, at any rate.
But assortative mating is having an impact on inequality more broadly. It’s not so much that well-educated people are more likely to pair off – although they are – but that educated women are more likely to earn serious money than a generation ago.
Consider my own mother: she was well on the way to a PhD in biochemistry when I arrived on the scene in the early 1970s. She then dropped out of education and spent most of her time looking after her children. Her academic qualifications had no impact on our household income. Assortative mating has always been with us but it’s only in a world of two-income households that it increases income inequality.
The sociologist Christine Schwartz showed in 2010 that the incomes of husbands and wives in the US are far more closely correlated than they were in the 1960s, and that this explained about one-third of the increase in income inequality between married couples. John Ermisch and colleagues have shown other consequences: in both the UK and Germany, assortative mating substantially explains low social mobility because the children of prosperous parents marry each other.
We should not place too much emphasis on all this. Assortative mating explains only part of the rise of inequality, and perhaps very little at the top of the income scale. The usual remedies for inequality – unionisation, redistributive taxes, minimum wages – still have the same advantages and limitations as ever, even if they need to reflect the reality of the two-income household. It’s a reminder that the most welcome social trends can have unwelcome side-effects.
Happy Valentine’s day.
‘The Undercover Economist Strikes Back’, by Tim Harford, is published by Little, Brown