Emilio Borghesan, Michigan, Ann Arbor

Paper: A Dynamic Evaluation of Parental Marriage and Children’s Skill Development

Abstract: Children who grow up in two-parent households score 0.2–0.4 standard deviations higher on covariate-adjusted cognitive skill measures than children in single-parent households. This paper analyzes the extent to which these differences reflect causal effects of marriage versus selection. We develop a dynamic Roy model that allows for selection into and out of marriage, with cognitive skill evolving according to a dynamic latent factor model. A long panel of marriage decisions permits identification of unobserved heterogeneity jointly affecting both marriage and skill development. Estimates indicate positive sorting on gains into marriage that is more pronounced at later ages. A decomposition analysis suggests that differences in household income explains 19% of the skill difference between children growing up in two-parent and one-parent households while differences in the technology of skill formation explain an additional 30%.