Cohabitation premiums in Denmark: income effects in immigrant-native partnerships

Annika Elwert, Lund University
Anna Tegunimataka, Lund University

Previous research has shown that marriage wage premiums exist for married men. These can be explained by either a causal effect from being married in terms of specialization benefits or signaling effects or in terms of selection. Similarly, it has been found that intermarried men tend to have higher earnings than their single or endogamously married counterparts. Regarding marriages between immigrants and natives, intermarriage premiums take up a general marriage premium but add a positive effect for the immigrant spouse by being married to a native. Through their native spouses, immigrants get access to various resources such as language skills, information about institutions and customs, and gain access to native networks. Due to these spillover effects, intermarried immigrants should be more successful on the labor market and intermarriage between natives and immigrants can be seen as boost for economic integration. However, a positive relationship between intermarriage and economic integration can also be caused by selection of more able immigrants into marriages with natives. In previous studies, spillover effects have only been studied from the time of marriage. However, theory suggests that human capital spillover even takes place in a period of cohabitation before marriage. We use a unique set of register data from Statistics Denmark, which gives the possibility of isolating cohabitating couples in order to analyze the mechanisms of this relationship. We attempt to establish a causal relationship between intermarriage/cohabitation and economic integration.