Marriage Market and the Distribution of Returns to Higher Education: A Dynamic Microsimulation Perspective for France

When starting a higher education programme, the returns on a particular degree is uncertain and risk-adverse students or those from low-income families may be reluctant to enrol.  In this article we estimate the distribution of returns to higher education taking into account the effect of the potential partner. This effect is estimated by introducing a specific demographical module in a dynamic microsimulation model. This module enables us to take into account the observed degree of educational endogamy in the marriage market as well as the heterogeneity in the union and separation calendar across gender and diploma.

On a first hand, our results show the potential partner effect decreases the risk on the value of the rate of return. This result indicates that there is an insurance effect on the value of a tertiary diploma stemming from the marriage market. On a second hand, our results exhibit differences between tertiary educated men and women: the median value of the return when taking into account the potential partner increases by five percentage point for women, whereas it remains stable for men. This result indicates that the effect of marriage market and its endogamy trend benefit substantially to women entering higher education.