Sunday, February 13, 2011

Is love in the air?

Love is in the air everywhere I look around. Love is in the air, every sight and every sound. And I don't know if I'm being foolish, don't know if I'm being wise but it's something that I must believe in and it's there when I look in your eye. Well not really but according to a recent article in an Irish newspaper (which I have mislaid) there is a boom in the number of couples marrying, despite or perhaps because of the recession.
On the hand marriages cost money so we would expect a fall but according to Oswald & Clark, the utility of marriage is worth a lot in monetary terms (about £70k per annum, in 2001 prices) so one might expect people to substitute into marriage since cash is hard to come by these days.
So whats the evidence for Ireland? I plot about 20 years of data on annual marriage and unemployment rates (which I extracted with some difficulty from the CSO web site). While its hard to infer much it seems that largely marriage rates fall as unemployment rises though it may rise at the high rates we currently observe.


Liam Delaney said...

GDP growth might be a better proxy for the opportunity cost of time. I think the basic idea is that if the wage profile becomes flatter people then tend to become more like to get married or have kids due to a substitution effect. But if it falls off so sharply (e.g. unemployment) then the income effect will dominate.

Martin Ryan said...

I know this is a preliminary investigation Kevin; and that there is some difficulty with the immediacy of data-availability; however, I wonder if there could be something to gain by refining the measure of the marriage rate?

If you have not done so already, it could make sense to calculate the marriage rate as 'the rate of marriage in the most relevant age cohort'; that is; how many people have been getting married between 20 and 50 years of age? I mainly propose this because there has been a clear demographic trend in the time-period that you examine.

The number of persons aged 0-14 years reached a peak of 1,044,000 in 1981 (the so-called "Pope's Children"). This means that the largest cohort in the country is currently in their late twenties/early thirties: an age when they are arguably most likely to think about making plans for marriage.

Of course, folk are getting married later than ever before (and there are grounds to suspect that this may apply even more so to men; and to those with higher levels of education). From CSO statistics it can be seen that the prevalence of singles substantially increased
between 1996 and 2006. In 1996, individuals reporting themselves to be single (on the Census)
made up 65% of the cohort aged 25-29 years (and 32% of the cohort aged 30-34 years). In 2006, 80% of individuals aged 25-29 years were single (50% of the cohort aged 30-34 years).

In relation to the measure of the unemployment rate, there is a clear downward trend from 1993-2001, stability from 2001-2007, and then a massively sudden jump back to high unemployment levels by 2009 (though not to as bad an extent as 1993). These trends suggest that looking at structural breaks could be important; perhaps first differences from 1993-2001 could also be considered (though if one is using annual rather than quarterly data there may not be a whole load to gain from this for eight years).

A visualisation of all the above is available at the start of a blog-post that I put together on unemployment last year:

The Advantage of Being Over 25 in the Labour Market

Also in the above blog-post, I metion that (at the time of writing) the under-25 unemployment rate was currently around 32.4%, higher than it has ever been since data has been available. In the 1980's recession, the under-25 unemployment rate was never any higher than around 26.3%.

However, this does not mean that those who are now in the typical age-group for marriage may be less likely to be unemployed. If you looks at the CSO analysis of the Live Register by age and duration (from November 2009); it can be seen that the 25-34 age-group makes up the bulk of the register; followed by the 35-44 age-group.

I know the Live Register is not designed to measure unemployment, but these statistics may lead to consider Liam's proposition strongly; that perhaps the income effect should dominate.

CSO Analysis of the Live Register by Age and Duration

Ultimately, it may be most desirable to examine the relationship between "age-cohort adjusted" marriage and unemployment rates.

Finally, Brendan Walsh has looked into unemployment rates and births, whhich may be of interest:

Brendan Walsh on Baby Boomers

Kevin Denny said...

Liam, I don't like mixing levels and changes in general (if thats what you had in mind) so I would use the level of say GNP per capita. I am not sure what you mean by substitution. Do you mean for women? I doubt many women leave the labour market immediately on marriage. They may have kids after a while & some may have had some already.

Martin, its the final investigation! It took me long enough to get those numbers from the CSO. But yes, something cohort specific would be interesting. The only numbers I saw by year was just the aggregate rate.

Mark McG said...

It wouldn't be annual data obviously but as a check you could get more of a breakdown from the census tables. These are definitely an underutilised resource, and are available back to 1926. For example from 2006.

Kevin Denny said...

Mark, it occured to me you might be able to do it that way. Untill recently marriage was largely a one way bet in that you couldn't easily get out of it so in the presence of uncertainty (about the economy or indeed your prospective spouse!) it might be better to wait.