Being Married May Not Be Like It Used to Be (Comments on: "Signaling game - a trivia" )

In a recent post, AP posed some questions about what signals would a man holding a baby at a mall be sending. Ignoring the self-absorbed nature of his question (after all, self-absorption is partly what this Cafe is all about), I will try to give some comments. The point in that post about the man wearing a certain t-shirt has been dealt with sufficiently in that post's comments and I won't discuss it here.

Being married probably sends different signals than it used to do...
In the old days, a married man would be thought of of having a stable life, an ability to make long term commitment, an aversion to risk etc. On average, marriage men would then be rewarded in the job market in the form of a marriage premium, loosely defined as the difference in wages between married and unmarried men, everything else including age, education, experience and work tenure the same. They would earn more, and accumulate wealth faster.¹⁾

Why does such premium exist? There are three main competing explanations. The first one is the discrimination explanation. This relates to the points raised earlier about married being seen as a signal of stability. Because of that, employers may have some bias in favor of married men when they make decisions on hiring (and firing), wages, benefits, and promotions . The second explanation is the specialization within marriage explanation, that says that marriage premium is a result of actual increased productivity that comes about when married men specialize in the market activities. They are able to do this because their spouses specialize in household/non-market activities (this is partly why I said "in the old days"). This increase in productivity translates to higher wages for married men. The third explanation is the selectivity explanation, which basically says the premium is observed because some of the qualities that make men perform well in the job market (responsibility, 'people' skills, good looks ²⁾) happen to be the same qualities that make them perform well in the marriage market, and thus they are rewarded in both markets. These qualities are observed by both employers and spouses but unobserved by the econometrician who then attributes the difference in wages between married and unmarried men to their marital status.

Empirically, marriage premium has been declining in western societies. I'm not aware of any study using Indonesian data (please enlighten me), but I would imagine even if the premium really has existed in the past, it would be less important now than it is before, especially for the sub-sample of Jakarta white collar workers. Given the lack of empirical evidence, that statement and the following are just conjectures and may well be proven wrong.

First, marriage is probably not such a good signal for stability anymore. With the cost of marriage dissolution (monetary and otherwise) decreasing, people are entering and quitting marriages easier. At least if you believe the newspapers and infotainment. If these anecdotal evidence are anything to go by (they probably shouldn't be ³⁾), marriage may now signal potential instability somewhere down the road, something that employers are keen to avoid.

Second, the gains from specialization are probably not important for Jakarta white collar workers because now, even young households typically would employ maids and nannies: there is not much specialization to begin with.

In short: being observed as a married man is probably not as advantageous in the labor market today as it was before. If that is true, than it seems that there is even less incentive for a woman who is active on the dating/marriage market to look at a man holding a baby at the mall favoringly. A guy who thinks that being observed as a married man is giving out signal that says "sorry I'm not available" is simply flattering himself. The signal he will be sending is probably: "Hi there. Even if I might be available - and remember the cost of dissolving my marriage is relatively low - you might as well look for a single man since I don't command that much premium in the labor market..."

...but having a child may still signal stability
What signal does holding the baby give away? In most cases, the arrival of a baby would be associated with an increase in specialization: the mother would reduce market hours, experience career interruption and a reduction in wages. The father would respond by increasing market hours and probably earning more. No need to look further for an example, read AP's (and Juli's) own account. Whether this would turn into an advantage is not clear; the total family income may stay constant because the increase in the husband's income may be matched by an increase in the family's spending (on the child) and the decrease in the wife's income, as the empirical work by Light ⁴⁾ has demonstrated.

However, having a baby may still send a strong signal about stability. Infotainment watchers probably agree with that statement. A lot of marriages of celebrities seems to hinge on these beautiful couples having an offspring. (Okay, after a disclaimer about not having empirical evidence, I got a little carried away - I am now using infotainment to support my argument!) To what extent it is really important is not clear, but having a child certainly increase the cost of divorce, monetary and otherwise.⁵⁾ Although having a noisy dispute over custody seems to be a new attention-getting vehicle a la Tamara Blezinsky (sorry, can't help it).

So, if you're caught holding a baby in public, you're actually sending a mixed signal. People may see you as a s.n.a.g. (if you still need a definition, you're probably reading the wrong blog). Another signal has been suggested by some commenters: you are a pushover of a husband and are dominated by your wife. Or that you cannot afford a nanny.Or that you chose not to hire a nanny even though you could afford it just to make a point. Or maybe you and your spouse want to make a point about equal bargaining in the household, and so on.

Or, if you're like me, you just enjoy spending time with your baby daughter and couldn't care less about other signals you might be sending.

¹⁾ See papers by Korenman and Neumark (1991), Korenman and Blackburn (1994) , Hersch and Stratton (2002) for examples of empirical papers on marriage premium.
²⁾ Here's a link to the discussion in the Cafe about what beauty can buy you in the labor market. Here's the related Slate article.
³⁾ Note that nationally, the rate of divorce in Indonesia has actually been on the decline in the past decades (Jones 2000), largely due the increase in the age of marriage and the decline in the number of arranged marriages. Shorter term trends or among a subsample of population (urban, white-collar workers) are hard to come by.
⁴⁾ Light (Demography May 2004).
⁵⁾ If the child's welfare is in each parent's utility function, a divorce that may affect the child's well being will be against their own interests.

signaling | marriage premium | household economics