Dalrock The mysterious male marriage premium Why do men…

Dalrock: The mysterious male marriage premium.

Why do men earn more after marrying, and then after divorce tend to stop growing their earnings?  The answer is quite simple, and boils down to incentives.  Men who want to marry know they need to earn more to signal provider status.  After marriage men have greater responsibilities, and therefore have to earn even more.  Threats of divorce ratchet this pressure up further, as men understand that the family courts are designed to separate fathers from their children while financially rewarding the mother at the father’s expense.  Divorce for women means ejecting the man and keeping both the kids and a large part of his paycheck.  Divorce for men means losing the kids and paying a steep monthly fee to finance the operation.

But since divorce removes the incentive married men naturally feel to earn more money, family court judges know they need to replace the natural incentive with something else.  This is why the family courts assign men earnings quotas (imputed income) based on their previous income.  The man might earn less than his quota, but he will be billed for child support and/or alimony based on this quota.  This quota system is enforced with the threat of imprisonment, and is not surprisingly despised by the men who find themselves forced into it.  This explains why divorced men earn more than never married men;  they have a quota to meet based on their income at the end of the marriage.  If they don’t maintain their married level of earnings, they will be sent to prison.  It also explains why divorced men’s earnings tend not to grow like they would have were they still married;  quota systems are effective in the short term at coercing hard work, but they create a disincentive for increasing productivity.  Under a quota system earning more only increases your quota.  Most men under our new quota system will work hard enough to stay out of prison, but they aren’t going to take risks and/or work harder for the privilege of increasing their quota.

Note that while Prager and Wilcox claim the pressure married men feel to work harder is a benefit to men, the St. Louis Fed likewise implies that being forced by a court to pay alimony and/or child support is an advantage divorced men have which never married men lack (emphasis mine):

…the added productivity that accompanies marriage must be of two kinds: (1) productivity from the marriage itself and/or (2) advantages that remain even after the marriage is dissolved.

We won the cold war because an incentive based system leads to a kind of dynamic productivity that a quota based system can’t ever hope to create.  Yet we have dramatically reworked our family structure in ways only the Soviets could truly appreciate.  This new system is hurting us in ways we refuse to accept, because accepting the cost would force us to rethink our family model. Part of the problem is that the costs associated with replacing marriage with a child support system weren’t immediately obvious. Since we pretended we still had a fundamentally marriage based family structure, initially men carried on as if that was the case.  In fact, most men today still do so.  However, over time the reality of the new system has caused not a marriage strike, but something more ominous.  Just like with the Soviet system, this will continue until we decide the ideology behind the quota system isn’t worth the economic pain it inevitably causes.  In the meantime, economists will remain baffled as to why married earn more than divorced men, and why both earn more than never married men.

Without acknowledging it as much an issue as some would do, this is also a logical basis to explain the wage gap. Professional men have an additional “breadwinner” incentive over their female counterparts that make them more likely to work longer hours or seek promotions.

Related: Dr. Helen – Men, Divorce, and Employment