The Marriage Premium in the Israeli Labor Market

Executive Summary

A study conducted by Taub Center researchers Michael Debowy, Prof. Gil Epstein, and Prof. Avi Weiss examines the link between marriage and salary level, and finds that, as in other high-income countries, wages of married employees are higher than their unmarried colleagues and that there is a distinct and positive premium. The study examined a number of individual characteristics of workers (like age and education level) and found notable differences between married and unmarried populations in Israel. The findings show that the hourly wages of women and men who are married are higher, and the premium is higher depending on additional characteristics like sector, gender, and occupation group.

Employment, wages and marriage in Israel

The study shows that the probability of a currently married man being employed is 10 percentage points higher than that of his unmarried peer. Men who were married in the past but currently are not married held an advantage of 3 percentage points as far as their probability of working, compared to their unmarried counterparts. By contrast, currently married women show a probability of working at 2 percentage points lower than single women, whereas divorced, separated, or widowed women have a 2 percentage point higher probability of working than single women.

The average hourly wage among married men is about 30% higher than that of their single peers (after controlling for other variables), but this advantage is completely erased when it comes to men who were previously married but currently are not. Among women, the marriage premium is lower: they earn about 20% more than single women with half of this advantage retained when they are no longer married.

Disparities when the breakdown is by gender, country of origin, and sector

As noted, the likelihood of married men to work is higher by 10 percentage points than for single men. In a breakdown by sector, the difference is 8–9 percentage points among Jews and almost 16 percentage points among non-Jews. Jewish non-Ashkenazi women are employed at a similar rate to single women, and those women who were married in the past work at even higher rates. By contrast, Ashkenazi women and non-Jewish women who are currently married or have been in the past do not show a higher likelihood of employment, and, among non-Jewish women, employment is even lower.

Jewish third generation men (those whose parents were Israel-born or born on different continent groups) or who are of mixed origin (Ashkenazi and Mizrahi) benefit from the highest premium, with salaries 36.5% higher than for single men, followed by Ashkenazi men and Mizrahi men, with premiums of some 25%–27%. Non-Jewish married men earn similarly to single men.

Among married women the premium is lower. Married Ashkenazi women receive a benefit of about 62% of the premium earned received by Ashkenazi men, whereas Jewish non-Ashkenazi women receive 84%–87% of the premium men of the same origin enjoy. Divorced, separated, and widowed Jewish non-Ashkenazi women receive the same premium as their married counterparts, whereas among Ashkenazi women the premium is received exclusively by currently married women. This is in contrast to men, where the divorced, separated, and widowed men do not earn more on average than single men.

Among non-Jewish women, for those who are currently married or were in the past, researchers found a negative premium: a salary that is lower by some 10% and 16% than that of single women, respectively. This is in addition to the negative link between current and past marriage and employment in this group.