Income inequality's sneaky culprit

Most of us recognize that a Cinderella story is just that — a story.

Would a real-life prince ever really select a non-aristocratic spouse, when he has a queue of princesses and princesses-to-be waiting to marry into his crown (even if they do lack an appealing wildlife retinue)?

But we can't be too judgmental. After all, many people tend to choose mates with whom they have the most in common. That includes values, social interests, and even economic status. In fact, the latter may be a contributor to income inequality in America, according to a new study.

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A working paper from the National Bureau of Economic Research discusses what economists call "positive assortative mating," the technical term for like marrying like. The New York Times explains that the paper is based on census data from 1960 to 2005; during that time, there was an increase in people marrying those with the same education level as themselves, which also was likely to mean that they would be in a similar socioeconomic class.

According to the analysis, whether a couple shared the same education level in 1960 would not have had as great an impact on U.S. income inequality as it would have had in 2005. In fact, the study says, if men and women were paired randomly by education level in 1960, the effect on income inequality would have been nominal. By contrast, if couples were paired randomly in 2005, income inequality would have been significantly lowered.

Can you guess why? It comes down to the increased number of working women and their contribution to household income. In 2005, college-educated men were 12 percentage points more likely than men in 1960 to marry a woman with their same level of education — and, as such, those households are reaping the income results.

As the Times puts it, "Not only are people more apt to marry someone similar to themselves today, but their choices also matter more to society."

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