Ethnic assortative matching in marriage and family outcomes: evidence from the mass migration to the US during 1900-1930

Positive assortative matching in terms of traits such as ethnicity and race has been prevalent in marital formation. One possible explanation for this is that spouses in endogamous marriages possess complementary skills and tastes that increase marital surplus. This paper aims to estimate the effects of ethnic assortative matching on a variety of household outcomes by using the exogenous variation in immigrant flows in the USA during the period 1900-1930 to disentangle the selection effect of partners. The major finding is that the complementarities in home production from same ethnic marriage enhances investment in household public goods such as childrearing and home ownership and reduces the market labor supply of wives. The OLS estimates of the sizes of these effects appear to be substantially biased downward, indicating positive selection into intermarriage in terms of unobservable traits that increase marital surplus.