Using the concept of constrained sequential job search, illustrate and explain how the male marriage premium can be an equilibrium outcome in a simple model of inter-linked frictional labour and marriage markets. Consider the following scenario: wages are uniformly distributed between 1 and 18 and the male reservation wage function is piecewise linear, with the marriage-independent reservation wage being equal to 6. Assume that inequilibrium there are 40 bachelors and 8 eligible single men. Calculate the male marriage premium if single men need at least a wage of 14 to be accepted by women but they are only prepared to match women's sexpectation up to a wage of 10. What happens if the wage required to get married increases to 16?

Using the concept of constrained sequential job search, illustrate and explain how the male marriage premium can be an equilibrium outcome in a simple model of inter-linked frictional labour and marriage markets. Consider the following scenario: wages are uniformly distributed between 1 and 18 and the male reservation wage function is piecewise linear, with the marriage-independent reservation wage being equal to 6. Assume that inequilibrium there are 40 bachelors and 8 eligible single men. Calculate the male marriage premium if single men need at least a wage of 14 to be accepted by women but they are only prepared to match women's sexpectation up to a wage of 10. What happens if the wage required to get married increases to 16?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter26: Factor Markets: With Emphasis On The Labor Market

Section: Chapter Questions

Problem 10QP

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