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A striking change in American society in the last 40 years has been the decline and delay in marriage. The fraction of … volatility also rose. We establish a quantitatively important link between these facts. If marriage involves consumption … commitments, then a rise in income volatility delays marriage. We quantitatively assess this hypothesis vis‐à‐vis others in the …
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We estimate the trend in the transitory variance of male earnings in the U.S. using the Michigan Panel Study of Income Dynamics from 1970 to 2004. Using both an error components model as well as simpler but only approximate methods, we find that the transitory variance started to increase in the...
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