The Economics of Marriage and Partnership

What economists say about why people form partnerships, from shared costs and risk-sharing to changing patterns of who marries whom.

Marriage is about love and commitment. It is also, among other things, an economic partnership. Economists have studied why people form long-term partnerships and how those patterns are changing.

Gains from partnership

Economists describe several gains from marriage or long-term partnership:

Shared costs: one home, shared appliances and shared meals cost less per person.
Risk sharing: if one partner loses a job, the other’s income can cushion the blow.
Joint investment: partners can invest together in a home, children or one partner’s education.
Specialisation: partners can divide tasks according to their skills or preferences.

Who marries whom

In many rich countries, people increasingly marry partners with similar education and earnings. Economists call this assortative mating. Several studies suggest that this pattern has become stronger over recent decades in the United States and some other countries, and that it can widen inequality between households, because high earners increasingly combine their incomes with other high earners.

Changing marriage patterns

In many countries people marry later than in the past, and more live together without marrying. Economists link these shifts to women’s rising education and earnings, which reduced the financial need to marry and raised the cost of leaving the workforce. The economist Betsey Stevenson and Justin Wolfers have argued that modern marriages are based less on specialisation and more on shared consumption and companionship.

Two partners, one flat

Two people each renting a one-bedroom flat for 900 dollars a month could share a two-bedroom flat for 1,300 dollars. Each saves 250 dollars a month, and they also share utility and internet bills. These savings are one reason living together can make economic sense, beyond any romantic reasons.

Thinking economists reduce love to money

Economists do not claim that people marry to save money. They study how economic forces shape the timing and patterns of partnership, and how partnership affects income, wealth and wellbeing. Love, culture and religion remain central to why people marry.

Key takeaways

Long-term partnerships bring shared costs, risk sharing, joint investment and specialisation.
Assortative mating means people increasingly partner with those of similar education and income.
This pattern can widen inequality between households.
Rising education and earnings for women have changed when and why people marry.