Dollars and Sex (13 page)

For example, they help us understand, in part, why the gap between the income earned by very rich households and that earned by very poor households has been widening in recent decades. One of several explanations for this phenomenon is that the coordination of dating markets has made it easier for individuals to form couples in which spouses earn at
similar levels. Gone are the days in which a highly educated, high-wage-earning man might marry his low-skilled, low-wage-earning high school sweetheart simply because they both come from the same community. A high-wage-earning man is now far more likely to marry a woman who also earns a high income, not just because more women are earning higher incomes (they are, of course) but also because he can now search for a partner on a much larger dating market.

Increased match quality, made possible by searching on a larger market, means being able to find a partner with a similar education level and earning ability. These marriages, between two high-wage-earning individuals, result in households with much higher incomes than those in which high-wage earners marry low-wage earners.

The availability of online dating markets to increase this tendency toward assortative mating has reinforced the existing economic class system and increased the earnings gap between rich and poor households.

A second insight given by an economic approach to dating markets is that inefficiencies in these markets can lead to individuals staying single for much longer than is optimal. If people spend years searching for love because they struggle with determining their own value on the market or get caught up in searching for qualities that are easy to measure (like age, height, education, race, and income), rather than the important experiential qualities, they miss out on enjoying the many economic benefits of marriage earlier in their lives.

We will see what those benefits are in the next chapter, but from a societal perspective when marriage markets do not clear efficiently, the end result can be lower overall fertility rates, a higher percentage of births to unmarried women, and higher expenditure on fertility treatments as men and women delay marriage into their 30s and 40s, or never marry at all.

It is for these reasons that governments in some countries, Singapore for example, have taken over coordinating dating markets by providing free online dating services, real-life opportunities for singles to meet each other, and workshops that teach well-meaning friends how to be good matchmakers.

One final example of the insight this economic approach affords us is explaining why there has been a dramatic decline in marriage rates by black women in the United States. The rise in academic achievement of black women relative to black men and increased incarceration rates of black men (again, topics we will soon discuss) explain two reasons why black husbands are relatively scarce. But those factors only affect the marriage rate of black women, in particular, because of the extremely low rate of interracial marriage. If all singles were indifferent to the race of potential partners, then we might reasonably expect that the marriage rate of black women would be similar to that of white women. The research we have discussed here demonstrating a strong same-race preference in dating enriches our economic understanding of why marriage rates are so low in the population of black women.

Which brings us to marriage. No topic of sex and love has garnered as much attention from economists as the questions surrounding marriage. One thing economics does well is understand change and, like it or not, marriage is changing. Not just the legal definition of marriage, but also what matters to us when we choose a marriage partner and, once the knot is tied, how couples make important decisions. As we are about to see, just because we are off the dating market doesn't mean markets don't play an important role in our sex and love lives.

“YOU CAN'T ALWAYS GET WHAT YOU WANT, BUT IF YOU TRY SOMETIMES, WELL, YOU JUST MIGHT FIND YOU GET WHAT YOU NEED.”

Mick Jagger may have spent only two years at the London School of Economics in his youth, but he seems to have acquired a good understanding of how at least one market operates—the market for love.

In love, and marriage, you don't always get what you want because your own value on the market limits who you are with when your individual market closes. Market theory suggests that the person you marry is one whose value on the market is equal to your own; otherwise, one of you could have done better by waiting until you found a match with a higher market value. Economic trade theory, on the other hand, argues that the most productive matches are those in which individuals are different enough from each other so as to exploit the gains from trade.

So while you may not get what you want, hopefully the person whose market value is equal to your own is exactly whom you need.

Before we explore how we choose the person we expect to be with for the remainder of our lives, we need to spend a few minutes talking about why it is that people marry, since that is the best way to understand what qualities bring two people together in matrimony.

Just for the record, the observations in this chapter, and in subsequent chapters, apply not only to those unions that are legally sanctioned, but also to any cohabitating relationship in which the couple is committed to a long-term relationship. And while for simplicity I sometimes revert to the traditional terms of husband and wife, bride and groom, much of what I say here is applicable to marriages in which spouses are of the same gender.

NOT YOUR AVERAGE LOVE STORY

I can't resist starting with my idea for a whole new set of wedding vows that are based on economic theory. These are just an example; couples can fill in the strengths and deficiencies of their own beloved. As you will see later, the vows I have chosen here would have been ideal for the marriage of Jane (whose story we will continue in
chapter 6
) had she had the foresight at the time that she was writing her own.

Groom: “I, [name of groom], agree to enter into a contract with you, [name of bride], that will govern the terms of our marriage. I accept that while I have met other women whose qualities were such that they surpassed my minimum requirements for a bride, the fact that they found me lacking has led me to choose you, my love, as my wife. What you lack in terms of education and income, you more than compensate for with your youthfulness and attractive appearance, and I vow that this trade-off is sufficient for me to choose you as my bride. I promise to be faithful, even though the low cost of searching and your inevitably declining value might one day encourage me to seek a new wife. I vow to work with you toward the common goal of exploiting the division of labor in the production of household goods so that our household will prosper. I will continue to invest in my human capital to ensure that your future expectations of our household income are met. While it may not be rational, I pledge to invest in our children and my asset portfolio as if I expected us to be together until death do we part.”

Bride: “I, [name of bride], agree to enter into a contract with you, [name of groom], that will govern the terms of our marriage. I accept that while I have met other men whose qualities were such that they surpassed
my minimum requirements for a groom, the fact that they found me lacking has led me to choose you, my love, as my husband. What you lack in stature and attractiveness, you more that compensate for with your level of education and occupational choice, and I vow that this trade-off is sufficient for me choose you as my husband. I promise that any children born into our marriage will be biologically your own, even as I know that I will be tempted to seek short-term relationships with men who possess a better genetic endowment. I will sacrifice my own human capital for that of our children, in the knowledge that you will bring in sufficient resources for our family to ensure our well-being. While it may not be rational, I will quell my inclination to behave in a risk-averse manner and pledge to invest in our marriage and my asset portfolio as if I expected us to be together until death do we part.”

At this point, the bride and groom would exchange rings, and the bride's sister would come to the front to sing a stirring rendition of “Can't Buy Me Love” by the Beatles. Or for those who prefer something more contemporary, Panic at the Disco's “I Write Sins Not Tragedies,” with its sage advice for would-be brides and grooms: “Much better to face these things with a sense of poise and rationality.”

People marry for a variety of reasons, but from an economic perspective the purpose of marriage boils down to two things: efficient production of household goods and services, and insurance in bad times. I am going to leave the issue of insurance until
chapter 6
, when we talk about how couples bargain within their marriage and, for now, focus on the qualities that maximize the production of household “goods” and “services,” including love, sex, and children.

Many household goods and services can either be produced by one person or purchased on the market, but often they are produced more efficiently (i.e., at a lower cost) when there are two people in the household. Let me give you a few examples:

The first good or service produced within marriage is sex and love. Sex can be purchased on the market, love—not so much. Purchasing sex on the market is very expensive not just in terms of explicit costs, but also in terms
of risk of infection, risk of exposure to humiliation and ridicule if the buyer is exposed, risk of arrest if purchasing sex is illegal, and risk of violence. All of these things, plus the sheer inconvenience, make buying sex on the market far less efficient than obtaining sex within marriage. Of course, people can always visit the casual-sex market (i.e., find sex in a bar or online), but that market has many of the same risks as explicit sex-market sex, with the additional concern that as people age, finding sex on the casual-sex market is more of a challenge.

Despite the common perception that married people do not have sex as frequently as their unmarried friends, the evidence from David Blanchflower and Andrew Oswald shows that married people have sex far more frequently than do single people; 76 percent of married people report having sex at least two to three times per month compared with 57 percent of never-married people and 41 percent of those who are divorced, widowed, or separated. In addition, 43 percent of people who are divorced, widowed, or separated and 24 percent of those who never married reported having no sex at all in the previous twelve months—compared with only 6 percent of married people who had no sex in the last year.

You may be tempted to argue that there is a big difference between quality and quantity of sex, and you would be right, but the same research finds that people with only one sexual partner in the previous twelve months were much happier than people who had more sexual partners. Maybe this isn't proof that sex within marriage is better-quality sex, but it is certainly evidence that having more sexual partners does not make people better off in terms of self-reported well-being.

If we consider sex a “service” that marriage provides, then it seems obvious that one of the reasons people marry is because married individuals obtain this service at a lower cost than do unmarried individuals.

The second example of a good or service produced within marriage is biological children. Not all couples want to have their own children, and many who do want them cannot have them, but for heterosexual couples
who both want and can have their own biological children, marriage is the most cost-efficient way to make that a reality. There are market alternatives, and for women some nonmarket alternatives, but again those are expensive and inconvenient.

Having children within marriage gives women some assurance that the children's father is committed to providing for them in terms of his time or his resources, or both, and it gives men some assurance that the children he is helping to raise are biologically his own rather than those of another man.

Marriage may not be the only way to have biological children, but it is the most efficient in that couples can produce children cheaply. In fact, for fertile couples who enjoy having sex with each other, the production of biological children is virtually free.