27 Feb “Living Together” is a Bad Deal for Your Wallet – and Your Life
Ladies, unless your Angelina Jolie and have endless money, you’ll probably want to marry that guy you’re living with. A new study suggests that women short change themselves when they settle for premarital cohabitation rather than marriage.
Looking at the National Longitudinal Survey of Youth, researchers conducted a cross-sectional log-wage regression (whoa… that sounds complicated!) to determine that there is a definite wage premium that accrues to men who marry vs. those who never marry and just cohabit. How much? The wage premium was more than 21 percent for married men, but just 6.5 percent for cohabiting men – relative to never-married and non-cohabiting men. In their complicated analysis they controlled for selection effects and differential wage growth, even as the size of the premium was reduced for both categories.
Guys, are you listening? If you marry, on average you’ll earn 21 percent more money than your friend who never gets married and 14.5 percent more than the friend who just lives with his girl friend. Let’s do some math. If a man earned $50,000 a year, that’s earnings of $500,000 over 10 years. Over a decade, a married man will earn $105,000 more than a non-married man and $72,500 more than a man who just cohabits with his girlfriend. That’s a bunch of money! I’m thinking you could almost pay for a house with just the money accrued from the wage premium. (I know you were thinking about a boat.) That would also add up to a very nice retirement … OK, it could also mean lots of very nice vacations!
Ladies, if you cohabit with a guy you’re getting a bad deal all around. You’ll do more of the housework and prepare more of the meals, you’ll contribute more than your share to the living expenses, and you’re more like to have an unfaithful mate. Oh yes, you’ll be much more inclined to abort your unborn child than even a single woman who becomes pregnant and has no live-in partner. Sounds like a really bad idea to me. Just saying…
Study after study confirms what should be obvious: For the sake of your own well-being and the well-being of your children, get married and stay married.
Arif Mamun, “Cohabitation Premium in Men’s Earnings: Testing the Joint Human Capital Hypothesis” Journal of Family and Economic Perspectives (2011) forthcoming.