How Much Does Assortative Mating, Status Exchange and Being Single Contribute to Household Income Inequality? The Case of Finland, 1987–2014

Jani Erola , University of Turku
Elina Kilpi-Jakonen, University of Turku

Previous studies covering developed countries suggest that changes in educational homogamy have contributed only a little to the changes in income inequality. We consider two potential reasons for the zero effects: the growing proportion of single adult households and status exchange between own education and parental background in the partnership market. We study these assumptions using register data on men’s and women’s income inequalities, education and parental class background in Finland 1987–2014. Income inequality is measured by the Theil index. The results suggest that selection into partnership covers most of the contribution of educational assortative mating on income inequality. Partnership homogamy explains a growing proportion of the between-group inequality linked to educational assortative mating. Status exchange plays a role, but the overall assortative mating by family background seems to be a more important factor contributing to income inequality. Over time, its role in income inequality seems to have remained steady.

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 Presented in Session 218. Family Histories and Economic Outcomes: Comparative European Perspectives