Inequality has exploded the past 30 years, because of the usual suspects: technology, Wall Street, Harry, and Sally.
Okay, it probably isn't fair to blame Billy Crystal and Meg Ryan for our widening income gap. But it is fair to say that When Harry Met Sally tells us something about why the rich have been getting so much richer than everyone else. That's high-earning college grads marrying each other—which a new paper estimates has increased inequality by 25 percent.
We used to live in a Mad Men world. Few men went to college, even fewer women did, and not many women, period, worked outside the home—not that they had many opportunities if they did. In 1960, 42.5 percent of married women hadn't graduated from high school. 39.6 percent had only done that. And just 37.7 percent of all women had or were looking for a job. The stereotype is that men married their secretaries, if their wives did work, and there's something to that—though highly-educated people did still pair up at high rates back then.
You can see that in the chart below, which breaks down 1960 marriages by each partner's education. It shows how much more or less likely a marriage was between, say, two college grads than what you would've expected from random chance. And it shows that for every combination of education level: people who didn't finish high school (HS-), high school grads (HS), people who attended some college (C-), college grads (C), and people with advanced degrees (C+). Anything more than 1 means there were disproportionately more of that type of marriage; anything less means the opposite.
(Note: I've highlighted all the homogenous pairs—HS- and HS-, C and C, etc.—with dotted lines).
All the data comes from a new paper that looks at how much people marrying someone like themselves—what economists charmingly call "assortative mating"—has contributed to inequality. The answer for 1960: not much.
Sure, people with at least a college degree were much more likely to marry each other than by chance. But this was a small group. It only made up 4.5 percent of all marriages. And it wasn't as if couples with two college degrees had two high incomes. Even highly-educated women didn't have many opportunities to earn a lot if they did work outside the home (which many didn't). In other words, most households still only had one big earner, relatively-speaking, regardless of the wife's education.
That made marriage a different institution back then. Men weren't looking for a soulmate, let alone someone to help pay the bills. They were looking for a good wife and mother. So they were willing to marry "down." Now, it doesn't look like that if you focus on how disproportionately likely college-educated men and women were to trade I-dos. But take another look, this time at the shaded areas. Men with a college degree were about as likely to marry women with only a high school degree as you'd expect by chance. And men with a college degree or more were twice as likely to marry a woman who hadn't finished college. This meant there were almost twice as many college-educated men married to women who weren't than were for the simple reason that many more women hadn't graduated from college than had.
I'll Have the Marriage My Classmate Is Having
That world is gone now. It's gone, because more people, especially women, go to college. Because women have the chance to work—and earn—more. Because couples need two incomes to afford the same lifestyle that one used to buy. Because people who graduate from college cluster in neighborhoods away from those who don't. And because people want more from marriage nowadays.
Among affluent marriages, it's a When Harry Met Sally world, where working men and working women of similar education and income levels bond and marry over similarities—movies, art, paprikash—rather than the differences that defined traditional marriage (he works/she cleans). This new arrangement promises a better world, but it has increased inequality. Here's how.
Five big trends have transformed the home and the workplace the past few decades. Those are more education, more women in the workforce, more financial insecurity, more marital expectations, and more assortative mating. Let's consider them one-by-one.
1) More education. In 1959, only percent of 14.8 men and 7.6 percent of women between the ages of 25 and 29 had graduated from college. In 2012, it was 29.8 and 37.2 percent. And by 2011, women had surpassed men in advanced degrees too.
2) More women in the workforce. In 1959, 37.2 percent of women had a job or were actively looking for one. In 2012, it was 57.7 percent. That said, it's still hard for women to lean in when they have to plan their careers around when they have kids, when daycare is so damn expensive, and when husbands don't always do their share of the housework. That's why men still dominate the highest-paying jobs that require an inhuman number of hours as a show of your semi-feudal obligation to work. And even if women do break through, they still don't get paid as much as men do for the same work—though, as Hanna Rosin points out, the gap is more like 9 cents for every dollar men make, and not 23 cents.