The impact of marital status change on earnings in Russia

Abstract

The paper estimates the impact of marital status change on an individual’s salary on the data of The Russia Longitudinal Monitoring Survey - Higher School of Economics. The purpose of the study is to assess how the changes in marital status (marriage, beginning of cohabitation or divorce) affect the wages of men and women in Russia, considering self-selection. We combine several approaches: mahalanobis distance matching within propensity score caliper, the method of instrumental variables estimation and a fixed effects model. The effect of marriage, cohabitation or divorce is estimated separately for men and women. We show that «marriage premium» for men is not the result of self-selection – on average, married men earn 5140 rubles more than those who are not married. The result obtained is primarily due to individual’s unobserved characteristics, which increase the likelihood of both marriage and success in the labor market. For women, the impact of marriage depends on the evaluation method chosen, but motherhood has a negative impact on their wages - with the birth of each child a woman starts to earn on average 3% less. Divorce does not affect the earnings of both men and women, considering self-selection. Cohabitation has a positive effect on a man’s earnings (earnings are growing by average of 4,8%). The findings may be useful in the context of social and demographic policy of the Russian Federation.