An Economic Proposition? Educational Assortative Mating and Earnings Inequality in Sweden, 2000-2010

Sammanfattning: Educational assortative mating and earnings inequality has both increased in both Europe and the United States in the last decades. As a result, educational assortative mating, or educational homogamy, has been suggested as a potential explanation for the increase in earnings inequality. According to this hypothesis increased sorting on education will lead to polarization between lower and higher-educated couples where the advantages of the latter will compound on one another and lead to increased economic inequality.   The majority of the studies to date report a non-relationship between educational assortative mating and earnings inequality, one of the exceptions being a study of Denmark. This exception has led sociologists to theorize that the impact of educational assortative mating could be especially strong in the Nordic countries. In this study I test this hypothesis by employing a novel decomposition method, the Theil-index, to answer if increases in educational assortative mating are associated with increases in earnings inequality in Sweden between 2000 and 2010, using data from the Standard of Living Survey (LNU).   The result is a non-relationship between homogamy and earnings inequality and an overall decrease in earnings inequality in the sample. The result is another null result for the hypothesis that educational homogamy leads to inequality, and points to a larger discrepancy between singles and couples than between couples. If corroborated, this decrease in earnings inequality would mean a divergence, in earnings inequality, between partnered individuals and the general population. Future studies should focus on the extent of this divergence.